Strategic Plan Strategic Plan

For the fiscal years 2003 – 2008
Strategic Plan Strategic Plan

The Department of the Treasury

For the fiscal years 2003 – 2008
ii Department of the Treasury

The cover photograph shows the Main Treasury Building, which houses the

offices of the United States Department of the Treasury. This magnificent

building at 1500 Pennsylvania Avenue, located next to the White House,

serves as a symbol of the themes for this strategic plan: prosperity, stability

and integrity.

The Treasury Building is the oldest departmental building in Washington. It is

the third oldest federally occupied building in Washington, preceded only by

the Capitol and the White House. The Main Treasury Building had a great

impact on the design of other government buildings. At the time of its

completion, it was one of the largest office buildings in the world. It is a

monument of continuing architectural and historical significance. The

Treasury Building was dedicated as a National Historic Landmark on

October 18, 1972.

The Main Treasury Building was built in phases, reflecting the increasing size

and importance of Treasury and changing national needs. The original

building consisted of the east and center wings. The building was designed

by architect Robert Mills, the architect of the Washington Monument, and

was completed in 1842. The south wing expanded the building and incorporated new technology to improve the structure and increase the security of

the vaults that held the Federal wealth. The original design was provided by

Thomas Ustick Walters, the architect of the dome of the U.S. Capitol, and

was refined during construction by Ammi B. Young and Isaiah Rogers.

Architect Alfred B. Mullett, who subsequently designed the State Department Building and the building now known as the Dwight D. Eisenhower

Executive Office Building, designed the north wing.

The north wing was completed in 1869, and contains the Cash Room,

which was used for the inaugural ball for President Grant’s first inauguration

on March 4, 1869. This grand but functional room housed the daily financial

transactions of the U.S. Government, and still embodies the dignity and

tradition with which the Department of the Treasury serves the Nation.

The Main Treasury Building provides a visual image of Treasury’s contribution

to the stability and prosperity of the Nation since Treasury’s beginnings in

1789. The majesty of the building serves as an icon to represent the true

wealth that it has contained and will continue to contain in the years to

come the men and women who have served and continue to serve the

Department of the Treasury since its creation in 1789. These men and

women have a long history of meeting the changing needs of the Nation,

promoting the Nation’s economic prosperity and serving as the stewards of

its economic and financial systems.

The Cash Room
Strategic Plan • Fiscal Years 2003-2008 iii

MESSAGE FROM THE SECRETARY

The Department of the Treasury has a long tradition of stewarding the

United States economic and financial system. As we have promoted

growth and prosperity through our Nation’s history, Treasury has evolved

to meet the Nation’s changing needs.

This Strategic Plan aims to continue that tradition. It will serve as a guide

for modernizing Treasury’s capabilities, preserving our standards for

excellence while adapting our operations to the challenges of a new

century.

One historic change at Treasury in the past year has been the divestiture of

most of the Department’s law enforcement divisions. The government

reorganization creating the Department of Homeland Security also created

an opportunity to focus the Department of the Treasury on its core

economic and financial policy missions.

The Treasury Strategic Plan seizes this historic moment, highlighting Treasury’s three main goals: promoting national prosperity through economic growth and job creation; maintaining public trust and confidence in our economic and financial systems; and ensuring the Treasury organization has the workforce,

technology, and business practices to meet the Nation’s needs effectively and efficiently.

By following this plan, I believe we can achieve those goals, and provide outstanding service and value

to the President, Congress, and the American public. The Department of the Treasury is committed to

these results.

John W. Snow

Secretary of the Treasury

John W. Snow
iv Department of the Treasury
Strategic Plan • Fiscal Years 2003-2008 v

TABLE OF CONTENTS

MESSAGE FROM THE SECRETARY ................................................................................. iii

TABLE OF CONTENTS ................................................................................................. v

MISSION AND ORGANIZATION ..................................................................................... 1

THE ECONOMIC AND FINANCIAL FOCUS ...................................................................... 2

THE ORGANIZATION OF THE DEPARTMENT OF THE TREASURY ....................................... 4

THE TREASURY STRATEGIC MANAGEMENT SYSTEM ....................................................... 6

THE TREASURY STRATEGIC GOALS AND STRATEGIC OBJECTIVES ..................................... 8

Strategic Goal E1- Promote Prosperous U.S. and World Economies .................. 9

Strategic Goal E2- Promote Stable U.S. and World Economies ....................... 14

Strategic Goal F3- Preserve the Integrity of Financial Systems ......................... 19

Strategic Goal F4- Manage the U.S. Government’s Finances Effectively .......... 25

Strategic Goal M5-Ensure Professionalism, Excellence, Integrity, and

Accountability in the Management and Conduct of the

Department of Treasury ..................................................... 30

APPENDICES

A. CROSSWALK OF TREASURY STRATEGIC GOALS, STRATEGIC OBJECTIVES,

AND BUREAU GOALS ..................................................................................... A1

B. EXECUTIVE SUMMARIES OF BUREAU PLANS ..................................................... B1

C. TABLE OF CROSS-CUTTING ISSUES AND LINKAGES TO PARTNERS ..................... C1

D. PROGRAM EVALUATIONS .............................................................................. D1

E. GLOSSARY OF TERMS AND ACRONYMS ............................................................ E1

Strategic Plan • Fiscal Years 2003-2008 1

Mission and Organization

The mission of the Department of the Treasury is to promote the

conditions for prosperity and stability in the United States and

encourage prosperity and stability in the rest of the world.

This mission statement highlights Treasury’s role as the steward of U.S. economic and financial systems,

and as an influential participant in the international economy. Treasury’s commitment to our citizens is

to create economic and employment opportunities for all by raising the rate of sustainable growth. To

the extent this objective is linked to world economy, Treasury will seek to influence global financial and

economic issues whenever possible to promote global economic growth and stability.

The Department of the Treasury is the primary federal agency responsible for the economic and financial

prosperity and security of the United States, and as such is responsible for a wide range of activities

including advising the President on economic and financial issues, promoting the President’s growth

agenda, and enhancing corporate governance in financial institutions.

In the international arena, the Department of the Treasury works with other federal agencies, the governments of other nations, and the International Financial Institutions (IFIs) to encourage economic growth,

raise standards of living, and predict and prevent, to the extent possible, economic and financial crises.
2 Department of the Treasury

The Economic and Financial Focus

The Treasury mission focuses on two interrelated

areas: economics and finance. Creating the

conditions for prosperity requires U.S. and

international economic and financial systems that

operate at full potential, maintain stable and

secure foundations for growth, and preserve the

integrity of systems and operations. As managers

of the Federal Government financial systems, the

Treasury must efficiently and effectively provide

accountability for federal funds and ensure the

best value is gained from available resources.

The Economic Focus

The Secretary of the Treasury

is the principal economic

advisor to the President. The

Secretary plays a critical role

in policy making by bringing

economic and government

financial policy perspective

to issues facing the government. Treasury has both a

policy and operational role

in promoting prosperous

U.S. and world economies,

raising standards of living,

and protecting this prosperity through secure and stable

domestic and international

economic and financial

systems.

The Department of the

Treasury serves as an advisor

to the President on measures to promote domestic

economic growth and prosperity, and on methods

for executing the Treasury elements of the

President’s economic agenda. These elements

include, but are not limited to, increasing coordination between economic and military/political

issues; administering the Jobs and Growth Tax

Relief Reconciliation Act of 2003; improving the

Fair Credit Reporting Act; increasing economic

growth, as measured by improvements in productivity and higher income per capita; and improving economic stability, as measured by a reduction

in the severity, length, and frequency of economic

downturns and crises.

Treasury develops policies and provides guidance

affecting fiscal matters, financial institutions,

financial regulation, and capital markets. Treasury

is responsible for the safety and soundness of

national banks, federally-chartered savings

associations, and federally-chartered savings

banks. Treasury provides focused assistance to

promote economic growth and raise the standard

of living in distressed communities by increasing

the availability of business capital and financial

services. Treasury also produces the coins and

currency needed by the Nation, and guards

against counterfeiting and

other misuse of our money.

In the international arena, the

Department of the Treasury is

the principal federal agency

responsible for developing

policies and guidance in the

areas of international monetary

and financial affairs, trade in

financial services, Customs

revenue functions, foreign

direct investment in the United

States, international debt

strategy, and U.S. participation

in international financial

institutions. In addition,

Treasury is a principal agency

for developing policies in the

areas of trade in goods and

non-financial services and

foreign investments abroad.

On these and other issues of international finance

and economics, Treasury partners with the

Department of State, the Federal Reserve System,

the Office of the U.S. Trade Representative, the

Export-Import Bank, the Overseas Private Investment Corporation, the Commerce Department,

and other Executive Branch offices and councils.

Treasury also works closely with the international

financial institutions, such as the World Bank and

the International Monetary Fund (IMF).
Strategic Plan • Fiscal Years 2003-2008 3

The Financial Focus

The Department of the Treasury is the principal

fiscal agent for the Federal Government, managing the Nation’s finances by collecting money due

the United States, making its payments, managing

its borrowing, and performing central accounting

functions. The Treasury administers the financial

system in a way that promotes its use for legitimate purposes, and prevents the system from

being used for purposes that support criminal

activity. Treasury’s role in executing the Nation’s

financial sanctions policies and countering money

laundering and other financial crimes, such as

terrorist financing, has become increasingly

important in recent years.

The Department of the Treasury is the primary

federal agency responsible for collecting taxes and

revenue on regulated commodities. The Department of the Treasury oversees, accounts for, and

reports on government collections and expenditures and is responsible for collecting delinquent

federal debt government-wide.

Treasury also determines and executes the strategy

to borrow what is necessary to meet the monetary

needs of the Federal Government at the lowest

possible cost over time. In achieving these financial goals, Treasury ensures liaison and coordination with other agencies on cross-cutting activities. These include almost all federal program

agencies for payments, collections, and debt

collection activities, and the Federal Reserve

System for payments, collections, and operational

aspects of the distribution and redemption of

government securities.

Management Focus and Operations

Treasury will achieve its strategic goals by building a strong institution, which is citizen-centered, resultsoriented, and actively promotes innovation through competition. We will work effectively and efficiently to implement the President’s Management Agenda across all Treasury bureaus and continuously

improve our internal business operations. Treasury bureaus support these goals through their internal

management goals as articulated in their individual bureau strategic plans.
4 Department of the Treasury

The Organization of the

Department of the Treasury

The Department of the Treasury is organized into two major components,

the Departmental Offices and the Bureaus. The Departmental Offices (DO)

are primarily responsible for policy formulation, while the bureaus are primarily operating organizations that execute many of the Treasury’s goals. The

majority of Treasury’s workforce and resources are focused in its operating bureaus. DO is composed of

divisions headed by Assistant Secretaries, some of whom report to Under Secretaries, with primary

responsibility for policy formulation and overall management of the Treasury Department.

Domestic Finance develops policies and economic guidance which help create the conditions for

prosperity at home through advice and assistance in domestic finance, banking, financial institutions,

federal debt finance, financial regulation, and capital markets.

The Office of Economic Policy is responsible for analyzing and reporting on current and prospective

economic developments in the U.S. and world economies and assisting in the determination of appropriate economic policies. Economic Policy’s global economic policies strongly influence the conditions for

prosperity abroad.

The Executive Office of Terrorist Financing and Financial Crime (EOTFFC) develops and implements U.S. Government strategies to combat terrorist financing domestically and internationally,

develops and implements the National Money Laundering Strategy as well as other policies and programs

to fight financial crimes. EOTFFC implements strategies to administer and enforce economic and trade

sanctions based on U.S. foreign policy and national security goals through the Office of Foreign Assets

Control (OFAC) and administers the Treasury Forfeiture Fund through the Executive Office for Asset

Forfeiture (EOAF). OFAC enforces economic and trade sanctions based on U.S. foreign policy and

national security goals. OFAC implements sanctions programs against targeted foreign countries,

terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of

weapons of mass destruction. The Financial Crimes Enforcement Network (FinCEN), OFAC and

EOAF report to EOTFFC.

The Office of International Affairs advises and assists in the formulation and execution of U.S. international economic and financial policy, including the development of policies for international financial,

economic, monetary, trade, investment, bilateral aid, environment, debt, development, and energy

programs. International Affairs develops policy for the U.S. participation in international financial

institutions.

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 estimates for the

President’s budget, fiscal policy decisions, and cash management decisions.

Internally, DO is responsible for overall management of the Department. Offices responsible for the

internal management and controls include General Counsel, the Assistant Secretary for Management

and Chief Financial Officer, Public Affairs, and the Treasurer of the United States. Also, inspector

general functions provide independent audits, investigations, and oversight to the Department of the

Treasury and its programs.

THE

DEPARTMENT OF THE TREASURY

1789
Strategic Plan • Fiscal Years 2003-2008 5

Treasury Bureaus carry out the operational facets of Treasury’s business.

The Alcohol and Tobacco Tax and Trade Bureau (TTB) enforces and administer laws on the production, use, and distribution of alcohol and tobacco products. TTB also collects excise taxes for firearms

and ammunition.

The Bureau of Engraving and Printing (BEP) designs and manufactures U.S. currency, many stamps,

securities, and other official certificates and awards.

The Bureau of the Public Debt (BPD) borrows the money needed to operate the Federal Government

and accounts for the Public Debt. It administers the Public Debt by issuing and servicing U.S. Treasury

marketable, savings, and special purpose securities.

The Community Development Financial Institutions (CDFI) Fund expands the capacity of financial

institutions to provide credit, capital, and financial services to underserved populations and communities

in the United States. (CDFI is not a bureau but has special program emphasis.)

The Financial Crimes Enforcement Network (FinCEN) collects, analyzes and shares information

needed to combat the financial aspects of criminal activity worldwide.

The Financial Management Service (FMS) provides central payment services to federal program

agencies, operates the Federal Government’s collections and deposit systems, provides government-wide

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

The Internal Revenue Service (IRS) is the largest of Treasury’s bureaus. It determines, assesses, and

collects internal revenue in the United States.

The U.S. Mint (MINT) designs and manufactures domestic, numismatic, and bullion coins as well as

commemorative medals and other numismatic items. The Mint distributes U.S. coins to the Federal

Reserve Banks and maintains physical custody and protection of our nation’s silver and gold assets.

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

banks to ensure a safe, sound, and competitive banking system that supports the citizens, communities,

and economy of the United States.

The Office of Thrift Supervision (OTS) charters, examines, and regulates federal thrifts to maintain

their safety and soundness. OTS also regulates state-chartered savings associations belonging to the

Savings Association Insurance Fund and savings association affiliates and holding companies.
6 Department of the Treasury

Strategic 

Goal

Performance

Goal 1.1

Performance

Goal 1.2 Treasury

Budget

Account/

Budget Activity

Program

Activity 1

Program

Activity 2

Bureau

General Goal 1

Performance

Goal 1.1 Account/

Budget Activity

Program

Activity 1

Performance

Goal 1.2

Program

Activity 2

Bureau

General Goal 2

Strategic

Objective 1

Performance

Goal 1.1

Performance

Goal 1.2

Account/

Budget Activity

Program

Activity 1

Program

Activity 2

Bureau

General Goal 1

Performance

Goal 1.1 Account/

Budget Activity

Program

Activity 1

Performance

Goal 1.2 Program

Activity 2

Bureau

General Goal 2

Strategic

Objective 2

Goal 1.1

Strategic Plan Budget

Annual 

Performance Plan

objectives. We realigned our internal management

goals to provide a strong platform on which to

address the five areas of the President’s Management Agenda and create the environment for

continuous improvement.

Through these efforts we have produced a fiveyear plan that is outcome oriented; incorporates

essential management practices such as performance measurement and accountability; fosters

human capital strategies that support agency

objectives and mission accomplishment; furthers

the integration of budget and performance; and

communicates to a broad and varied audience our

goals and objectives and the initiatives we have

underway to achieve them.

Strategic Plan Supports the Strategic

Management System

As shown in the diagram below, our Strategic Plan

provides the foundation for the Treasury Strategic

Management System, which links the Treasury

Strategic Plan, bureau strategic plans, Annual

Performance Plans, the budget submission, and

performance management and reporting. We use

the Strategic Management System to further

integrate budget and performance.

The Treasury Strategic Management System

Strategic Plan as a Communication

Device and Management Tool

The Treasury Strategic Plan serves two important

purposes: it communicates Treasury’s goals and

objectives to Treasury employees, customers, and

stakeholders; and it is a management tool to

incorporate performance and accountability into

the budget process. The President’s Management

Agenda provides the framework for tightening

the relationship between budgeting and program

effectiveness. We established a meaningful set of

outcome oriented performance measures and will

use them to improve the management of

Treasury’s business lines, make further progress

toward world-class performance, and continue to

create value for the American people.

Building our Strategic Plan for FY2003-2008 has

given us an opportunity to refocus and redefine

our core financial and economic missions. In

particular, we defined and established our

escalating role in stopping terrorism by dismantling terrorists’ financial infrastructure. Treasury

also conducted an extensive review of its current

strategic goals and objectives, updating, revising,

adding, and eliminating as needed. Departmental and bureau leadership have brought their

goals, objectives and measures into alignment

with the Treasury Mission, strategic goals and
Strategic Plan • Fiscal Years 2003-2008 7

Linkage to Bureau

Strategic Plans

The Treasury Strategic Plan incorporates bureau

general goals that directly support Treasury

strategic objectives. Bureaus articulate in their

own strategic plans the full set of goals, initiatives,

and performance measures used to achieve their

own strategic and general goals, as well as the goals

reported in the Treasury plan. DO maintains

internal goals and objectives to focus and guide

their operations.

This Strategic Plan articulates the mission, strategic goals, and strategic objectives of the Treasury

Department as a whole. It also includes the high

level means and strategies by which the Treasury

and its bureaus achieve the Treasury strategic

objectives. Means and strategies describe actions to

be taken to achieve stated goals. The bureau

general goals in the Strategic Plan provide the

framework for, and are included in, the Annual

Performance Plan. In the Annual Performance

Plan according to OMB Circular A-11, the

bureaus and Departmental Offices establish

specific, measurable, annual performance goals.

We establish performance measures to explicitly

gauge the level of success against the performance

goals. By defining the performance goals and

measures in an objective and quantifiable manner

or as precise descriptive statements, we have an

accurate, independent determination of actual

performance.

Performance Measures and the Budget

Process

Treasury uses the Program Assessment Rating Tool

(PART), in conjunction with internal controls, as a

bridge between program performance measures

and the budget request. We will apply the PART,

over five years, to all Treasury programs, bringing

funding levels and program performance into

better alignment throughout the Department. The

linkage of performance and budgeting also has a

beneficial impact on the ongoing management of

the Treasury’s programs. Managers use the internal

Performance Reporting System (PRS) to continuously assess progress in achieving desired outcomes, and adjust actions accordingly. Implementing the Treasury Strategic Management System

ultimately impacts the dollars that programs

receive and encourages effective ongoing management. This Strategic Plan, as the foundation for

bureau goals and measures provides the framework

for the system. Using data provided through the

PRS, keeping an eye on the results achieved, and

using the Strategic Plan as our decision-making

tool, Treasury, its customers and stakeholders,

become the true beneficiaries of our Strategic

Management System.

Definition of Terms:

Mission describes why Treasury exists.

Strategic Goals represent overarching statements

of aim or purpose used to group the strategic

objectives.

Strategic Objectives define how the Department

of the Treasury will carry out its mission over the

strategic planning period of Fiscal Years 2003 to

2008. The Strategic Objectives demonstrate the

complex and varied approaches needed to achieve

the strategic goals.

Means and Strategies describe how Treasury and

its operating bureaus and programs will achieve

their strategic objectives. These means and strategies cover the major functions and operations, but

omit support-type operations and activities.

Bureau General Goals are linked to Treasury

strategic objectives, and the bureau Performance

Plans. The bureau general goals describe how the

bureaus will carry out their missions during the

strategic planning period.

Partners are outside entities that contribute to,

influence, and/or regulate activities.

Key Factors articulate challenges to achieving

desired goals as well as elements that contribute to

our success.
8 Department of the Treasury

The Treasury Strategic Goals and Strategic Objectives

The Treasury Strategic Plan has five strategic goals. Each strategic goal has supporting strategic objectives.

The goals and objectives describe how Treasury will manage and influence the U.S. and international

economic and financial systems so that they operate at their full potential, maintain stable foundations

for growth, and preserve the integrity of their systems and operations. The fifth goal provides Treasury’s

corporate guidance for the internal operation of the Department of the Treasury and gives strategic

direction for achieving the President’s Management Agenda.

Economic (E) Financial (F)

Management (M)

Strategic Goal Strategic Objectives

Promote Prosper- Stimulate economic growth and job creation (E1A)

ous U.S. and Provide a flexible legal and regulatory framework (E1B)

World Economies Improve and simplify the tax code (E1C)

(E1)

Promote Stable Increase citizens’ economic security (E2A)

U.S. and World Improve the stability of the international financial system (E2B)

Economies (E2)

Preserve the Disrupt and dismantle financial infrastructure of terrorists,

Integrity of drug traffickers, and other criminals and isolate their support networks (F3A)

Financial Systems Execute the Nation’s financial sanctions policies (F3B)

(F3) Increase the reliability of the U.S. financial system (F3C)

Manage the U.S. Collect federal tax revenue when due through a fair and uniform application of the law (F4A)

Government’s Manage federal debt effectively and efficiently (F4B)

Finances Make collections and payments on time and accurately, optimizing use of electronic mechanisms (F4C)

Effectively (F4) Optimize cash management and effectively administer the Government’s financial systems (F4D)

Ensure Protect the integrity of the Department of the Treasury (M5A)

Professionalism, Manage Treasury resources effectively to accomplish the mission and provide quality customer

Excellence, service (M5B)

Integrity, and

Accountability in

the Management

and Conduct of

the Department

of the Treasury

(M5)
Strategic Plan • Fiscal Years 2003-2008 9

Strategic Goal E1- Promote Prosperous U.S. and

World Economies

The aim of this Strategic Goal is to ensure that the

United States and World economies perform at full

economic potential. In order to perform at its full

potential, the U.S. economy must increase its rate

of growth and create new, high quality jobs for all

Americans. Additionally, the legal and regulatory

framework must support this growth by providing

an environment where businesses and individuals

can grow and prosper without being limited by

unnecessary or obsolete rules and regulations.

Treasury plays diverse roles as to the domestic

economy. From serving as the President’s principal

economic advisor to issuing tax refunds to millions

of Americans, the Treasury has a significant

influence on creating the conditions for economic

prosperity in the U.S.

A prosperous world economy serves the United

States in many ways. It creates markets for U.S.

goods and services, and it promotes stability and

cooperation among nations. For these reasons, the

Department of the

Treasury will work

with other federal

agencies and offices

to promote international economic

growth and raise

international

standards of living

through interaction

with foreign governments and international financial

institutions.

Key Partners in Achieving this Goal:

On domestic economic affairs Treasury works

primarily with the Departments of Agriculture,

Commerce, Housing and Urban Development,

Interior, Health and Human Services, Transportation, Veterans Affairs, the Small Business Administration, the Social Security Administration, the

Federal Reserve Board, the Federal Deposit

Insurance Corporation, the National Credit Union

Administration (NCUA), the Securities and

Exchange Commission, the Federal Financial

Institutions Examination Council (FFIEC), State

Tax Agencies, the U.S. Postal Service, the Pension

Benefit Guaranty Corporation, the Commodity

Futures Trading Commission, the White House,

Congress, and various advisory committees.

On global economic issues Treasury’s key partners

include the Department of State, the Federal

Reserve System, the Export-Import Bank, the

Overseas Private Investment Corporation, the

Office of the U.S.

Trade Representative,

the Organization for

Economic Cooperation

and Development, the

Basel Committee on

Banking Supervision,

G7 partners, G8

partners, G10 partners,

G20 partners, the

International Monetary

Fund, the World Bank,

and other multilateral

development banks.
10 Department of the Treasury

Key Factors Affecting Achievement

of this Goal:

Treasury’s primary role is to influence and shape

U.S. and global policies to create the conditions

for growth and improved standards of living.

Domestically, key factors include:

• Multitude of economic influences. Countless

variables impact domestic and foreign economic conditions. From consumer confidence

to terrorist acts, a vast array of events and

activities influence the course of the U.S.

economy.

• Changes in the financial services industry.

Competitive pressures, consolidation of

financial institutions, development of new

products and services, and other changes in

the market will impact efforts to improve and

modernize the U.S. financial system, and

consequently have an impact on economic

performance.

Globally, key factors include:

• External shocks. Economic and financial

crises are difficult to predict, and the effectiveness of responses to them depends to a significant extent on the adequacy of policies other

countries adopt and the reaction of financial

markets. In addition, factors such as natural

disasters, infectious disease, war, and civil

unrest may adversely affect economic performance.

• Increased globalization and complexity. The

rapid increases in the volume of financial

transactions, types of financial instruments,

and number of global players challenge the

ability of the regulatory community to remain

as modern as the market in its efforts to

promote financial stability.

• U.S. trading partners’ commitment. The

degree of commitment of major U.S. trading

partners to strengthen regional and multilateral trading initiatives and further open

domestic markets will have an impact on the

achievement of our objectives.

• Difficulty of consensus. Failure among

officials from many different countries to agree

on a flexible approach to economic and

regulatory cooperation could delay progress in

establishing new or expanding existing arrangements. Moreover, the U.S. must forge

agreement with other member countries in the

international financial institutions (IFIs) to

achieve many of the objectives and strategies

noted under this goal.

• Predominance of private finance. Private

capital flows dwarf official sources. The

capacity of the monetary authorities to

influence events largely rests on their ability to

influence financial markets’ expectations.
Strategic Plan • Fiscal Years 2003-2008 11

Strategic Objective E1A: Stimulate

Economic Growth and Job Creation

The Department of the Treasury, with other

agencies and organizations, works to stimulate

economic growth and raise living standards in the

United States and abroad.

Treasury supports U.S. economic growth by

developing and implementing policies for domestic

economic development, tax programs, banking

and financial institutions, and other fiscal matters.

Treasury also pays particular attention to improving the economies of distressed communities. The

creation of good jobs for Americans is an essential

element in a balanced economic plan that will

accelerate and sustain our recovery, increase

workers’ standards of living, and improve the

economic performance of our Nation now and for

years to come.

Internationally, most of humanity lives in developing and emerging markets with low standards of

living and little opportunity for economic advancement. Reducing this extreme poverty can dramatically improve health and welfare worldwide.

Furthermore, the U.S. benefits when developing

and transitional countries expand their economies

and open their markets. Greater economic opportunity in developing and emerging markets can

enhance regional stability, advance democracy,

reduce the spread of infectious diseases, and

provide new opportunities for profitable trade.

Treasury, through its responsibility for U.S. money

invested in the IFIs as well as international economic policy, plays a role in accelerating growth

and improving living standards around the world.

The United States and the world benefit from a

strong, integrated international trading system.

Opening world markets to increase trade promotes

global prosperity, and prosperity promotes peace.

As we integrate nations and peoples through trade,

we invest in the future security of the U.S. and the

rest of the world. Treasury leads the U.S. efforts to

liberalize the financial aspects of the international

trading system.

Means and Strategies

Domestically, DO’s highest priority initiative is to

implement the President’s growth agenda. Ongoing, long-term initiatives include pressing for tax

changes, encouraging efficient savings and investment, designing policies that improve the efficiency and productivity of various sectors of the

American economy, and continuing to develop

forecasting capabilities to project emerging trends

and drive policies.

CDFI promotes job creation by providing financing and technical assistance to financial institutions (e.g., community development banks, credit

unions, loan funds, microenterprise funds, community development venture capital funds, and

bank community development corporations) that

finance businesses and commercial real estate

development in underserved communities, and tax

credit authority to community development

entities (CDEs) whose investments help create jobs

and stimulate economic growth in underserved

communities.

The CDFI Fund strengthens the capacity of a

nationwide network of regulated and non-regulated financial institutions serving distressed

communities. The CDFI Fund certifies these

institutions, and gives technical and financial

assistance to them. By strengthening this segment

of the U.S. financial system, the Fund helps to

minimize the potential effects of wide-scale

disruptions in the U.S. financial markets, particularly in distressed communities that may not be

served by traditional regulated institutions.

On the international front, DO has two main

initiatives intended to increase economic growth

and raise living standards. First, DO implements

U.S. development strategy for the Multilateral

Development Banks (MDBs), focusing on improving productivity and social return on investment in

MDB lending and grants and specifying and

tracking measurable results for all projects. Second,

DO advocates for growth in economic bilateral

relationships, especially with under-performing

industrial nations.
12 Department of the Treasury

Treasury is also part of a task force responsible for

setting up the Millennium Challenge Corporation

(MCC) to administer the Millennium Challenge

Account (MCA). The MCA, a Presidential initiative, creates incentives for specific measurable

results, channeling funds to countries that follow

pro-growth policies. MCA operates on the principle that aid is more likely to promote economic

growth and raise living standards in countries that

pursue the sound political, economic, and social

reforms necessary for development to occur.

DO plays a critical role in supporting trade

liberalization, the increase in the free trade of

financial services, and cross border investment.

DO works to incorporate provisions for trade

liberalization and financial services liberalization

into international trade negotiations, including the

Doha, Qatar, round and the Free Trade Area of the

Americas (FTAA) , as well as other free trade

negotiations. By ensuring that the investment

chapters of trade agreements, as well as Bilateral

Investment Treaties (BITs), include provisions that

support the free transfer of capital and other

protections for U.S. investors, DO promotes the

growth of cross-border investment. DO plays a key

role in the development of U.S. trade and investment policy, as well as retaining oversight of

Customs’ revenue functions. DO supports

economic ties through the exchange of tax information and works to initiate, complete, and

update bilateral tax treaties and reform U.S.

international tax rules to encourage efficient

capital flow by removing tax barriers to crossborder investment.

Since the World Trade Organization (WTO)

conference in Doha, Qatar, in November of 2002,

Treasury has advanced a proposal for the global

liberalization of trade in financial services. The

United States has completed free trade agreements

with Chile and Singapore. Negotiations are

underway with the Central American countries,

Morocco, the Southern African Customs Union,

and Australia. By 2005, the U.S. hopes to complete a

free trade agreement for the whole western hemisphere – the Free Trade Area of the Americas (FTAA)

– creating the largest free trade zone in history.

Measuring Success

The U.S. Gross Domestic Product (GDP) growth

rate and the U.S. unemployment rate will be the

measures of our success domestically. Internationally, we will measure the real GDP growth in

developing, emerging, and industrial markets, as

well as the proportion of people living on less than

$1 a day. For free trade initiatives, we will measure

our performance by the increase in U.S. trade

(total imports and exports) and the negotiations of

agreements on trade, financial services and investment.

Strategic Objective E1B: Provide a

Flexible Legal and Regulatory

Framework

To achieve its full potential, the U.S. financial

sector must be guided by a flexible legal and

regulatory framework that allows financial institutions to offer a full array of competitive services.

The legal and regulatory framework must ensure a

safe and sound national financial system and must

promote the growth of financial services, fair access

to financial services, and fair treatment of banking

and thrift customers.

Means and Strategies

In 2003, the federal financial regulatory agencies,

including OCC and OTS, started a three-year

effort to obtain suggestions from the industry and

public on more streamlined and less burdensome

ways to regulate.
Strategic Plan • Fiscal Years 2003-2008 13

Through its licensing and regulatory processes, the

OCC supports national banks’ efforts to remain

competitive and consistent with safety and soundness. The OCC works to streamline its licensing

procedures and keep regulations current, clearly

written, and supportive of an effective supervisory

process. The OCC’s program of risk-based

supervision focuses on banks’ abilities to properly

manage and control risks and tailors an individual

bank examination to its risk profile activities.

Federal-chartered banks operate under a set of

uniform national standards.

Without compromising regulatory responsibilities

and the risk-based examination approach, OTS

works to adjust its operations and budget to ensure

no increases in assessment rates. It tailors examinations to the risk profile of individual institutions.

It conducts melded safety, soundness, and compliance examinations, and develops streamlined

examination procedures for small institutions.

OTS ensures that the application process is

responsive and streamlined, enabling the thrift

industry to provide competitive financial services.

Measuring Success

We will measure the percentage of applications

processed within standard timeframes. We will

also gauge our success by minimizing the increase

in assessment rates.

Strategic Objective E1C: Improve and

Simplify the Tax Code

Treasury is committed to improving and simplifying tax laws and administrative guidance in a

manner consistent with important tax policy goals

such as fairness, efficiency, and effective enforcement. A more fair tax code would treat similarly

situated taxpayers the same and provide an equitable distribution of the tax burden among taxpayers with different abilities to pay. A more economically neutral and rational tax system would

allocate labor and capital to their most productive

uses, reduce interference with economic incentives,

and be more conducive to economic growth. A

simpler tax system would reduce the significant

cost of tax compliance for businesses and individuals and reduce the intrusiveness of tax administration.

Means and Strategies

DO has primary responsibility for efforts to

simplify and reform the tax code to reduce the cost

of compliance for businesses and individuals and

drive economic growth. DO prepares draft tax

reform legislation and works to secure its enactment, while developing the fact base (e.g., time

and cost to file) that focuses and supports reform

initiatives and helps measure the impact of tax

code changes. In addition, DO works to simplify

compliance through the adminstrative guidance

process.

IRS will implement tax code reforms as the

Congress passes corresponding legislation. IRS

will also reduce the cost of compliance by simplifying tax forms, making electronic reporting seamless, and improving pre-filing guidance.

Measuring Success

We will measure the cost of compliance for

individuals and small businesses.
14 Department of the Treasury

Strategic Goal E2- Promote Stable U.S and

World Economies

The aim of this strategic goal is to create the

conditions which allow the American people to

feel economically secure because they have the

savings and other resources necessary to live as they

desire, and are protected from financial frauds and

other crimes. Achieving this goal requires a wide

range of actions by Treasury, from promoting

personal savings to protecting the security of

pensions, ensuring the privacy of personal information used in financial transactions, and maintaining the solvency of the government retirement

programs many Americans depend on.

This goal promotes stability in the world economic

and financial systems to prevent crises. It also aims

to ensure that the world economic system is used

for legitimate purposes, and to deny access to those

who wish to commit financial crimes, such as

money laundering and terrorist financing.

Key Partners in Achieving this Goal:

Domestically, Treasury works with, among others,

the Federal Reserve System; the Food and Drug

Administration; the Bureau of Alcohol, Tobacco,

Firearms, and Explosives; the Federal Deposit

Insurance Corporation; Customs and Border

Protection; the Federal Trade Commission; the

U.S. Trade Representative; state agencies; and the

banking and thrift industries.

On global economic issues, Treasury’s key partners

include the Department of State, the Federal

Reserve System, the Export-Import Bank, the

Overseas Private Investment Corporation, the

Office of the U.S. Trade Representative, the

Organization for Economic Cooperation and

Development, the Basel Committee on Banking

Supervision, the Interagency Country Exposure

Risk Committee (ICERC), G7 partners, G8

partners, G10 partners, G20 partners, the International Monetary Fund, and the multilateral

development banks.
Strategic Plan • Fiscal Years 2003-2008 15

• Difficulty of international consensus. Failure

among officials from many different countries

and international institutions to agree on an

effective approach to international economic

stability could delay progress in establishing

new or expanding existing arrangements.

Moreover, the U.S. must forge agreement with

other member countries in the IFIs to achieve

many of the objectives and strategies noted

under this goal.

• Predominance of private finance. Private

capital flows impede official sources. The

capacity of the monetary authorities to

influence events largely rests on their ability to

influence financial markets’ expectations.

Key Factors Affecting Achievement

of this Goal:

Key factors for economic security for the American

people include:

• Difficulty of consensus. We can only achieve

significant initiatives regarding private pension

reform, Social Security and Medicare in the

context of broader political consensus.

• Changes in the financial services industry.

Competitive pressures, consolidation of

financial institutions, development of new

products and services, and other changes in

the market will impact personal savings rates.

• Changing demographics. During the next

decades, we expect the retirement of the babyboomers to put pressure on the Social Security

and Medicare systems, particularly affecting

retirement security objectives.

Key factors for the international financial

system include:

• External shocks. Economic and financial

shocks are difficult to predict, and the effectiveness of responses to them depends, to a

significant extent, on the adequacy of policies

other countries adopt and the reaction of

financial markets. In addition, factors such as

natural disasters, infectious disease, war, and

civil unrest may adversely affect economic

performance.

• Increased globalization and complexity. The

rapid increases in the volume of financial

transactions, types of financial instruments,

and number of global players challenge the

ability of the regulatory community to remain

as modern as the market in its efforts to

promote financial stability.
16 Department of the Treasury

Strategic Objective E2A- Increase

Citizens’ Economic Security

Economic security includes ensuring that Americans have adequate personal savings to support

them in tough times or retirement; guaranteeing

that private pension plans will meet their obligations to their beneficiaries; protecting consumers

from fraud and deception; and protecting personal

information used in financial transactions. It also

includes the long-term strategy for managing the

Social Security and Medicare programs. Lastly, it

addresses financial education, so that Americans

are better prepared to manage their personal

finances.

Means and Strategies

To increase the personal savings rate and ensure

people make informed financial decisions, DO

coordinates financial education efforts across the

U.S. Government. DO supports pension legislation that properly measures liabilities and aligns

funding targets so that all pensions have the

resources necessary to support their beneficiaries.

DO, supported by FMS, ensures that policy

makers and the public have accurate measures and

a clear understanding of the long-term fiscal

imbalances in the Social Security and Medicare

programs. Lastly, DO promotes legislation that

safeguards sensitive personal financial information.

TTB will ensure that only qualified applicants

enter the alcohol and tobacco industries at the

federal level. The Bureau will monitor alcohol

beverages in the marketplace to detect contaminated and adulterated products. TTB will also

conduct investigations to ensure appropriate label

designation and/or product authenticity, and will

investigate instances of prohibited trade and

distribution practices in the beverage alcohol

industry.

Measuring Success

We will measure increases in citizens’ economic

security by an increase in the wealth-adjusted

personal savings rate. We will also measure the

increase in the proportion of U.S. adult populations with retirement accounts.
Strategic Plan • Fiscal Years 2003-2008 17

Strategic Objective E2B- Improve

the Stability of the International

Financial System

Treasury is committed to improving the stability of

the international financial system in order to

prevent crises, and to minimize the impact of those

that do occur. Financial crises in developing and

emerging markets can undo the benefits of years of

economic progress, throw millions into poverty,

create political instability, and may require expensive international intervention. By continuing to

build a more stable international financial system,

Treasury will enhance the conditions necessary for

growth and improved standards of living through

the developing and emerging markets.

International Financial Institutions (IFIs), such as

the International Monetary Fund (IMF), the

World Bank, and other multilateral development

banks (MDBs), play a key role

in enabling global economic

growth and stability. They

must use their resources in the

right places, at the right times,

and for the right reasons. The

U.S. is a major stakeholder in

the IFIs and contributes a

significant portion of their

resources toward the broader

objectives of U.S. international economic policy. The

Treasury Department has the

responsibility for ensuring that the institutions

appropriately use the resources the U.S. contributes. The Treasury Department works with other

nations and the leaders of these institutions to help

strengthen the IFIs’ effectiveness by encouraging

and guiding implementation of key reforms.

Through these reforms, the IFIs can better ensure

that they use the funds in the most effective

manner, in the countries where they will have the

most impact, thereby encouraging the most

sustainable and stable development activities and

delivering measurable results for their sponsors.

Means and Strategies

DO has the lead in developing and implementing

the U.S. Government’s emerging markets strategy

with the goals of less frequent crises, greater

ownership of policy at the local level, increased

private capital flows, and higher credit ratings.

Several important elements of this strategy include

developing a framework for analyzing and resolving currency “mismatch” problems (i.e., overvalued

or undervalued currencies) with the goal of

avoiding sharp exchange rate fluctuations and

potentially expensive interventions; and improving

our measures of emerging market vulnerability in

order to better predict and prevent crises.

Treasury systematically reviews how the IFIs use

the money the U.S. government has invested in

them. In addition to this general oversight role,

DO leads the effort to reform the IMF, the MDBs,

and the Paris Club. The Paris Club is an informal

group of official creditors whose role is to find coordinated and sustainable solutions to the payment

difficulties experienced by debtor nations. Paris

Club creditors agree to

rescheduling debts due

to them. Rescheduling

is a means of providing a

country with debt relief

through a postponement

and, in the case of

concessional rescheduling, a reduction in debt

service obligations. Part

of the reform agenda

includes ensuring that

the IFIs incorporate

measurable goals into their activities so they can

quantify and assess their progress.

Measuring Success

We will measure our performance by the increase

in the dollar volume of capital invested in developing and emerging markets and by the reduction in

the number of crises in developing and emerging

markets due to default on sovereign loans, currency depreciation, or banking failures. We will

also measure the increase in the average Millennium Challenge criteria scores for federal funds going

through development banks and the decrease in the

number of countries completing Paris Club processes

that later have debt sustainability problems.
18 Department of the Treasury
Strategic Plan • Fiscal Years 2003-2008 19

Strategic Goal F3- Preserve the Integrity of

Financial Systems

The purpose of this strategic goal is threefold.

First, it aims to ensure that the U.S. financial

systems will continue to operate without disruption from either natural disasters or manmade

attacks. Second, it will keep the system free and

open to legitimate users, while excluding those

who wish to use the system for illegal purposes.

Third, it ensures that the U.S. financial system and

access to U.S. goods and services are closed to

individuals, groups, and nations that threaten the

U.S.’s vital interests.

The terrorist attacks of September 11, 2001 and

ensuing world events clearly identified the need to

ensure the continuous operation of the U.S.

financial system during crisis. It also reinforced the

need to eliminate the international flow of funds

that finance global terror. At the direction of the

President, Treasury launched the financial front in

the war on terrorism and took the lead in global

efforts to combat the financing of terrorism and

other financial crimes.

Key Partners in Achieving this Goal:

Treasury’s key partners include the Departments of

Justice (DoJ), State (DoS) and Homeland Security

(DHS); the National Security Council (NSC);

federal law enforcement agencies, including the

Federal Bureau of Investigation (FBI), Bureau of

Immigration and Customs Enforcement (BICE),

and the U.S. Secret Service (USSS); federal

financial regulators and supervisors, including the

Federal Reserve Board (FRB), the Federal Deposit

Insurance Corporation (FDIC), the Securities and

Exchange Commission (SEC), the Commodities

and Futures Trading Commission (CFTC), and

the National Credit Union Administration

(NCUA); state and local authorities; private sector

financial institutions, including banks, credit

unions, money service businesses, and securities

broker/dealers; foreign jurisdictions and authorities; and international bodies, including the

Financial Action Task Force (FATF), the G7,

International Monetary Fund (IMF), World Bank,

various FATF-Style Regional Bodies (FSRBs),

various multi-lateral development banks, the

Organization of American States (OAS), the Basel

Committee on Banking Supervision, and the

Egmont Group of Financial Intelligence Units.

Key Factors Affecting Achievement

of this Goal:

• Federal, state, local and international

cooperation. Controlling the flow of funds to

terrorists, enforcing international sanctions,

and battling money laundering and other

financial crimes will require cooperation at all

levels. Achieving such widespread cooperation

will be an enormous endeavor.

• Changes in the financial services industry.

Competitive pressures, consolidation of

financial institutions, development of new

products and services, and other changes in

the market will impact efforts to improve the

reliability and maintain the integrity of the

U.S. financial system.

• Advanced technologies. Advances in reprographic technology are becoming more

affordable and widely used, thereby broadening the counterfeiting threat. Other new

technologies, such as electronic cash, electronic

purses, Internet electronic payment systems,

and Internet banking, increase the ability of

individuals to rapidly transfer large sums of

money, and could pose a challenge to counter

money laundering efforts.
20 Department of the Treasury

Strategic Objective F3A-Disrupt and

Dismantle Financial Infrastructure of

Terrorists, Drug Traffickers, and Other

Criminals and Isolate Their Support

Networks

The Department of the Treasury leads the U.S.

Government’s multi-faceted effort to keep the

world’s financial systems free and open to legitimate users, while excluding those who wish to use

the systems for illegal purposes. The broad range

of activities in this area includes stopping the flow

of money to terrorist groups, drug traffickers, and

other criminals, disrupting their support networks.

Stemming the flow of funds to terrorist groups is

critical to our national security and the overall war

against terrorism. Treasury works closely with

other federal agencies–both as chair of the National Security Council’s Policy Coordination

Committee (PCC) on terrorist financing and

through other relationships–foreign governments,

international bodies, and private financial institutions to attack the financial infrastructure of

terrorism.

Fundamental components of this effort include

identifying, blocking, and dismantling terrorist

financial support networks; isolating them from

their funding sources; and denying them access to

the international financial system. The Executive

Office for Terrorist Financing and Financial

Crimes (EOTFFC) is at the forefront of these

efforts. Through its work with the Office of

Foreign Assets Control (OFAC) and the Financial

Crimes Enforcement network (FinCEN), and

through direct outreach to foreign countries and

international bodies such as the Financial Action

Task Force (FATF), the EOTFFC works to ensure

that all countries are cooperating and implementing appropriate measures in this effort.

Abuse of the financial system, however, is not

limited to terrorist financing. Treasury continues

to focus on other types of abuses and, in particular,

money laundering by organized criminals, narcotics traffickers, and corrupt foreign officials.

Treasury will continue efforts to deny money

launderers access to the U.S. and international

financial systems through law enforcement and

appropriate financial regulatory initiatives, as well

as cooperation with foreign countries and international bodies such as the FATF. Treasury is

dedicated to attacking money laundering and

disrupting all abuses of the domestic and international financial systems. To further this effort,

Treasury coordinates development of the National

Money Laundering Strategy; issues and implements

money laundering regulations; investigates financial crimes, and collects, analyzes and disseminates

financial intelligence to support foreign and

domestic law enforcement investigations. Treasury

also investigates and enforces compliance with

U.S. tax laws.

Means and Strategies

On the terrorism front, DO is developing and

leading the U.S. anti-terrorists financing strategy

in order to freeze terrorist assets and block terrorist

financing networks. DO is identifying the donors,

facilitators and fundraisers for terrorist and cutting

the money off at its source. DO is implementing a

coordinated, global attack on terrorist financing by

engaging international partners and ensuring

worldwide compliance on counter-terrorism

financing standards. Treasury leads interagency

teams overseas to work with foreign central banks,

finance ministries, and regulators to tighten their

laws and regulatory oversight of terrorist

fundraising groups.

In addition to focusing on terrorist financing,

Treasury is combating money laundering by

organized criminals, narcotics traffickers, corrupt

foreign officials, and other criminals. To implement the National Money Laundering Strategy

domestically, Treasury is expanding the reach of

anti-money laundering obligations under the Bank

Secrecy Act (BSA) and the USA Patriot Act,

ensuring compliance with those laws and regulations.
Strategic Plan • Fiscal Years 2003-2008 21

FinCEN, with DO, issues BSA and USA Patriot

Act regulations. FinCEN, working with the

financial regulators and supervisors, monitors and

ensures compliance. FinCEN supports law

enforcement by collecting, analyzing, and disseminating financial intelligence to support investigations. In a modernization effort, FinCEN seeks to

collect most BSA information electronically;

modernize its BSA database systems; implement a

user-friendly data retrieval system; and provide

enhanced access to law enforcement through the

Gateway process.

The IRS-CID (Criminal Investigation Division)

participates in an array of law enforcement task

forces, including the FBI’s Joint Terrorism Task

Forces (JTTFs) and U.S. Attorney’s Offices’ AntiTerrorism Task Forces (ATTFs). The IRS contributes to the National Money Laundering Strategy by

assisting in the enforcement of the BSA and USA

Patriot Acts through the identification of HighRisk Money Laundering and Related Financial

Crimes Areas (HIFCAs).

Internationally, Treasury seeks to secure – both

bilaterally and through international bodies such as

FATF, IMF, and the World Bank – global compliance with international anti-money laundering

standards, developing the capacity of foreign

financial intelligence units, and improving its own

capacity to assist and act on the information these

foreign units provide. DO, OFAC, FinCEN, and

IRS play significant roles in this effort.

To address foreign narcotics traffickers, OFAC,

operating primarily under the International

Emergency Economic Powers Act (IEEPA) and the

Foreign Narcotics Kingpin Designation Act, works

to freeze the assets of key individuals and business

enterprises of foreign narcotics trafficking organizations. OFAC coordinates with law enforcement

and refers leads and background information to

support criminal investigations and prosecutions.

FinCEN contributes to the international effort

operationally by assisting foreign investigations

and structurally by providing training and technical assistance to foreign countries developing their

own financial intelligence units.

Measuring Success

We will measure our progress by the percentage

increase in the number of drug trafficking and

terrorist related financial networks identified and

made public, and by the percentage increase in

assets frozen under drug and terrorist related

sanctions programs.

We will also measure the level of international

compliance with the FATF recommendations on

money laundering, terrorist financing, and the

number of financial crimes cases referred and

supported for prosecution.

In addition to the quantitative measures, qualitative factors resulting from the designation programs will be examined. These include the

importance in the drug trafficking world of newly

designated drug kingpins, the significance and cost

of specific business designations to drug cartels,

and the significance of specific designated terrorists, i.e. the key nodes for terrorist financing.
22 Department of the Treasury

Strategic Objective F3B- Execute the

Nation’s Financial Sanctions Policies

DO, primarily OFAC, has responsibility for

designing, implementing, and enforcing a variety

of statutes, executive orders, and regulations

imposing economic sanctions on foreign entities to

further the foreign policy and national security

objectives of the United States. The design of

economic sanctions also involves International

Affairs and the Office of General Counsel.

Generally, U.S. economic sanctions deprive targets

of the use of their assets and/or deny them benefits

of trade with the United States. Certain programs

remove assets from the control of those that would

use them to harm U.S. citizens and interests. The

economic sanctions programs are primarily

directed against countries and groups of individuals, such as terrorists and narcotics traffickers, who

engage in activities that pose an extraordinary

threat to the national security, foreign policy or the

economy of the United States.

Sanctions programs may be either comprehensive

or selective, using the blocking of assets and/or

trade or investment restrictions to accomplish

administration policy and goals. For certain

countries, the sanctions apply to dealings with that

nation’s government and/or with other countries.

The prohibitions extend not only to dealings with

the government, but also to its country’s citizens,

residents, and commercial enterprises. Prohibitions

also apply to specific individuals and entities

identified as specially designated nationals (SDNs),

specially designated narcotics traffickers and

kingpins (SDNTs and SDNTKs), specially

designated global terrorists (SDGTs), and foreign

terrorist organizations (FTOs).

In administering these programs, OFAC generally

relies upon Presidential authorities contained in

the Trading With the Enemy Act (TWEA), the

International Emergency Economic Powers Act

(IEEPA), or upon specific legislation to prohibit or

regulate commercial or financial transactions with

specific foreign countries or groups.

Means and Strategies

DO, in particular, International Affairs and

OFAC, develops and implements the U.S.

Government’s financial sanctions policies. They

identify, trace, and freeze sanctioned assets; issue

licenses; support prosecutions related to financial

sanctions policies; and impose fines for violations

of sanctions policies. DO also works with international partners to coordinate global enforcement of

sanctions policies. The design of economic

sanctions also involves International Affairs and

the Office of General Counsel.

Measuring Success

Our key performance measure will be the decrease

in the estimated flow of funds from the U.S. to

sanctioned entities.
Strategic Plan • Fiscal Years 2003-2008 23

Strategic Objective F3C- Increase the

Reliability of the U.S. Financial System

Our Nation’s financial system must remain

operational at all times. Treasury is responsible for

ensuring the strength and resilience of critical U.S.

financial markets, and minimizing the potential

effects of wide-scale disruptions. Additionally, the

recent string of corporate scandals signals the need

for better corporate governance to ensure the

reliability of the U.S. financial system. Treasury

ensures the integrity of the national currency and

the safety of funds placed in financial institutions.

Treasury also administers a temporary federal

program, established by the Terrorism Risk

Insurance Act of 2002, which provides for a

transparent system of shared public and private

compensation for insured losses resulting from acts

of terrorism.

Means and Strategies

DO and bureaus develop and implement critical

infrastructure protection policies that strengthen

both the U.S. financial system and the fiscal

systems of the U.S. Treasury.

DO administers the Terrorism Risk Insurance

Program (TRIP), which was enacted by the

Terrorism Risk Insurance Act of 2002 on November 26, 2002. The new law establishes a temporary Federal program that provides a transparent

system of shared public and private compensation

for insured losses resulting from acts of terrorism,

to protect consumers by addressing market disruptions and ensure the continued widespread availability and affordability of property and casualty

insurance for terrorism risk. In addition, TRIP

allows a transitional period for the private markets

to stabilize, resume pricing of such insurance, and

build capacity to absorb any future losses, while

preserving state insurance regulation and consumer

protections.

DO promotes enhanced corporate disclosure and

governance to protect American investors and

improve confidence in financial markets.

BEP designs and manufactures high quality

security documents (including currency) that meet

customer’s requirements for quality, quantity, and

performance as well as deter counterfeiting. In the

near-term, BEP will issue redesigned currency to

further enhance security and deter counterfeiting.

OCC ensures risks to the national banking system

are anticipated, understood, addressed, and

conveyed to national banks through examinations

that review banks’ accounting practices and the

integrity of their management information systems, business continuity plans, off-balance sheet

activities, and other aspects of an institution’s

corporate governance. The OCC leads efforts to

coordinate supervisory activities performed in

national banks by the various federal regulators,

and chairs the Electronic Banking Group of the

Basel Committee to address global electronic

banking issues. The OCC also participates on the

Financial Banking and Infrastructure Information

Committee (FBIIC) that facilitates federal efforts

to improve the reliability and security of the U.S.

financial system.

OTS ensures that OTS-regulated thrift institutions

operate in a safe and sound manner through

effective supervision, and asseses the financial

condition and risk profile of thrift institutions

through examinations to identify violations of law

and regulation and potential financial and economic problems. OTS monitors capital levels and

earnings performance in order to minimize the

occurrence of inadequately capitalized thrifts and

enable the prompt resolution of risks. During

2002, OTS began the process of combining safety,

soundness, and compliance examinations to

enhance overall effectiveness.

OTS participates on FBIIC, chaired by the

Treasury Department, and works with the Department of Homeland Security and the Office of

Cyberspace Security to improve the reliability and

security of the financial industry’s infrastructure.

OTS reviews continuity of operations and emergency preparedness plans during exams.
24 Department of the Treasury

The Mint makes a continuous effort to implement

new and innovative coin production technology in

the context of changing market conditions and

legislated requirements for coinage and design.

The Mint designs cost-effective marketing, advertising, and promotion programs to provide quality

products and services to expand and maintain its

customer base. The redesigned coins, as exemplified by the new nickel to commemorate the 200th

anniversary of the Lewis and Clark expedition,

mark the importance the Mint places on creating

beautiful coin designs that reflect America’s

diversity.

Measuring Success

We will measure the:

• Number and degree of negative shocks to the U.S.

capital markets;

• Strength of the national banks and thrifts

through composite CAMELS scores (a measure

incorporating many aspects of a financial

institution’s health);

• Ability of key financial institutions to recover

clearing and settlement activities in event of

disruption; and

• Estimated counterfeiting rates of new bills.
Strategic Plan • Fiscal Years 2003-2008 25

Strategic Goal F4- Manage the U.S. Government’s

Finances Effectively

As the primary fiscal agent for the Federal Government, Treasury manages the Nation’s finances by

collecting money due the United States, making its

payments, managing its borrowing, performing

central accounting functions, and producing coins

and currency to meet demand. The Department of

the Treasury serves as the primary federal tax

collecting agent and collector of revenue on

regulated commodities.

Treasury oversees, accounts for, and reports on

government collections and expenditures, is the

chief disburser of federal payments, and collects

delinquent federal debt government-wide. The

Department determines and executes the federal

borrowing strategy to meet the monetary needs of

the Government at the lowest possible cost. The

goal of all these activities is to provide the American public with cost-effective, efficient, and secure

management of federal finances, while employing

modern technology and providing quality customer-centered service.

Key Factors Affecting Achievement

of this Goal:

• Changes in the Internal Revenue Code.

Changes made for various policy reasons to the

Code often pose challenges for tax administration. Furthermore, changes intended to

simplify the Code depend on a political

consensus.

• Electronic commerce. The speed of adoption

of electronic commerce will have an effect on

the administration and collection of taxes.

• Market conditions. Market conditions affect

demand and interest rates. Increases in interest

rates generally result in increased consumer

awareness of investment alternatives.

• Statutory limit on amount of debt. The

debt limit could potentially restrict the ability

to borrow.

Key Partners in Achieving this Goal:

Treasury works with, among others, the Departments of Transportation, Education, Agriculture,

Veterans Affairs, Labor, Justice (and FBI), Transportation, Homeland Security (and USSS),

Housing and Urban Development, Health and

Human Services, the U. S. Postal Service, the

Pension Benefit Guaranty Corporation, State Tax

Agencies, National Credit Union Administration,

practitioner and preparer associations, communitybased coalitions, low-income tax clinics, the

banking and thrift industry, tax software professionals, the Federal Reserve System, the Joint

Financial Management Improvement Program

(JFMIP), and international financial institutions.
26 Department of the Treasury

Strategic Objective F4A- Collect

Federal Revenue When Due, Through

a Fair and Uniform Application

of the Law

The Department of the Treasury must collect the

revenue due to the Federal Government in a

manner that is not only timely but also fair. In the

context of tax collection, fairness is primarily a

product of compliance. Treasury works to educate

all Americans and help them meet these obligations. Treasury also works to increase the electronic

collection of payments and improve the ease of

payment.

Means and Strategies

DO is working to increase compliance with tax

laws by supporting IRS compliance initiatives and

initiating, completing and updating tax information exchange treaties with other nations. DO is

also implementing a variety of procedures to

enhance the timeliness and quality of administrative guidance to ensure that taxpayers understand

their responsibilities, and to administer the tax

laws appropriately and fairly. On the legislative

front, DO is seeking enactment of Treasury

proposals to combat abusive tax shelters. It is also

seeking legislation authorizing the use of private

collection agencies.

IRS works to improve compliance through better

and more targeted taxpayer education, enhanced

reporting, more voluntary agreements, improved

regulations, earlier intervention, and a reduction in

the length of the appeals process. IRS is maximizing the collection of delinquent non-tax debts and

referring delinquent non-tax debt owed by commercial vendors, separated employees, and nongovernment agencies to FMS for collection.

IRS is working to enhance and expand the availability of its electronic services, including the IRS

website, electronic filing, and electronic payments.

IRS will expand electronic document repositories

and develop a multilingual centralized database.

IRS is enhancing its pre-filing guidance in order to

improve tax payers’ understanding of complex tax

law provisions. IRS is modernizing its work

processes and expanding its partnership with

individuals and organizations by helping taxpayers

file returns, increasing electronic filing options,

making notices and letters are more understandable, expanding multi-lingual customer assistance,

and paying refunds faster.

TTB is working to increase compliance by applying state-of-the-art statistical methods to measure

and analyze compliance with tax laws, and identify

any gaps in tax payments. TTB will also move

from random selection of audit targets to riskbased selection, and will investigate and assist with

the prosecution of business entities suspected of

being involved in tax evasion schemes, including

diversion and smuggling of taxable commodities.

TTB will forge partnerships with, and provide

training to, federal, state, and other governmental

entities to enforce tax laws.

TTB will enhance online information for taxpayers

and other industry members to make complying

with regulations easier. TTB will provide regulations,

forms, and other information in plain language

format, and continue to create alternative excise tax

return filing methods through e-Government.

Legislation is proposed to establish a permanent

and indefinite appropriation to reimburse financial

institutions for services they provide as depositories

and financial agents to the Federal Government.

These services support FMS programs that “collect

revenue” electronically, including the Electronic

Federal Tax Payment System (EFTPS), the

Lockbox Network, plastic cards, Electronic

Transfer Accounts (ETA) and CA$HLINK.

FMS and the IRS, along with the small business

community, are working on strategies to significantly increase the number of EFTPS enrollments.

Additionally, FMS will continue to explore

methods for reducing the costs of its banking

services, using less expensive electronic mechanisms

such as Paper Check Conversion at lockbox sites.
Strategic Plan • Fiscal Years 2003-2008 27

Measuring Success

We will measure the:

 • Reduction in the potentially collectable inventory;

• Proportion of tax returns filed electronically;

 • Closure to receipt ratios;

 • Coverage rates;

 • Levels of service;

 • Tax compliance rates through the National

Research Program; and

 • Fairness of the tax system administration as

measured by scores on the IRS’s customer satisfaction survey.

Strategic Objective F4B- Manage

Federal Debt Effectively and Efficiently

Treasury is responsible for borrowing what is

necessary to meet the Government’s financing

needs. The sum of all borrowing is called the gross

federal debt. Treasury’s goal is to provide government financing at the lowest cost over time.

Issuing debt regularly and in predictable quantities

fulfills this mission. The risks to regular and

predictable issuance include unexpected changes in

our borrowing requirements, the demand for our

securities, and anything that inhibits timely sales of

our securities. To reduce these risks, Treasury

closely monitors economic conditions, fiscal

policy, and market activity and, when necessary,

responds with changes in debt issuance based on

thorough analysis and discussions with market

participants. We also seek to lower our borrowing

costs by ensuring timely, reliable sales of securities

through continuous improvement in the auction

process.

Means and Strategies

DO works to effectively finance government

operations, including efficiently meeting the

Government’s borrowing needs. In order to

measure success and focus further efforts, DO is

developing and using metrics to track the relative

cost of financing the U.S. Government. Treasury

is also working to secure a long-term legislative

solution to the debt ceiling issue.

BPD is working to effectively finance government

operations, and efficiently meet the borrowing

needs of the Federal Government. As part of that

effort, it is, with the support of DO, moving to a

100% paperless savings bond program, and aiming

to achieve “two minute auction” performance.

FMS is working to maximize the collection of

delinquent debts. FMS establishes and maintains

alliances with customer agencies and stakeholders

that promote effective debt collection policies and

procedures. FMS utilizes all available crossservicing tools and is expanding the offset program, baring delinquent debtors from obtaining

federal loans and loan guarantees. FMS is increasing the referral of eligible, legally enforceable debts

for its offset and cross-servicing systems.

Measuring Success

We will measure success by the cost per dollar of

debt issued, divided into operational and financing

costs.
28 Department of the Treasury

Strategic Objective F4C- Make

Collections and Payments on Time and

Accurately, Optimizing use of Electronic

Mechanisms

Treasury collects approximately 95 percent of total

federal receipts, such as individual and corporate

income and other taxes, duties, fees, debts, and

other money owed to the U.S. Government. The

Department devotes the bulk of its resources to

collecting taxes. Each year the IRS collects more

than $1.5 trillion primarily through the EFTPS.

FMS administers the world’s largest collection

system, including EFTPS, and facilitates efficient

collections by promoting electronic collections to

federal agencies. The purpose of this objective is

timely, complete collection of all monies due the

government consistent with good customer service

and “best practice” business efficiency.

Means and Strategies

FMS will continue to concentrate efforts on

converting remaining check payments to electronic

funds transfers (EFT). FMS is currently working

with the Federal Reserve System and the Social

Security Administration on initiatives involving

EFT research, marketing, and education campaigns. FMS will work with the IRS to meet the

Congressional mandate for IRS to collect 94

percent of business taxes electronically. They will

accomplish this through expansion of electronic

collections such as Pay.gov, EFTPS-On Line, and

Paper Check Conversion. FMS will also use Paper

Check Conversion at its Lockbox sites to reduce

paper processing at Lockbox banks and improve

the efficiency of the Lockbox system.

FMS has undertaken efforts to modernize its

payment system, incorporating new technologies,

on the Internet. In FY 2003, FMS will implement

the Secure Payment System, a more efficient and

secure, web-based replacement for the current

Electronic Certification System used by Federal

Program Agencies to certify payments. Additionally, FMS initiated projects to consolidate, improve, and replace its 35 payment applications and

to replace and upgrade its check payment and

reconciliation system. These two efforts are known

as Payments Application Modernization and the

Treasury Check Information System.

FMS will also continue to maintain a leadership

role in the Automated Clearing House (ACH) and

efforts to upgrade and expand the application for

one of two grants payment systems, Automated

Standard Application for Payments (ASAP).

Measuring Success

We will measure the percentage of payments and

collections made electronically, on-time, and

accurately.

Strategic Objective F4D- Optimize

Cash Management and Effectively

Administer the Government’s Financial

Systems

Treasury manages the government’s cash position

to ensure that funds are available on a daily basis to

cover federal payments. Managing the

government’s cash flow with the most up-to-date

and accurate information benefits the taxpayer by

enabling Treasury to maximize investment earnings

and minimize borrowing costs within established

policy objectives. To accomplish this objective,

Treasury must closely monitor the government’s

receipts and payments and accurately forecast the

government’s current and future daily cash requirements. In addition, Treasury must execute its

borrowing operation in an efficient and reliable

manner.

Treasury plays a key role in strengthening the

Federal Government’s financial infrastructure. This

infrastructure provides government-wide accounting and reporting services; compiles and publishes

government-wide financial reports; operates the

government’s collection and deposit systems;

provides central payments services for Executive

Branch agencies; processes and resolves claims on

all lost, stolen, and forged payments; oversees the

Federal Government’s daily cash flow; manages

government-wide debt collection services; and

provides government-wide policy and assistance for

cash and credit management.
Strategic Plan • Fiscal Years 2003-2008 29

Treasury is also responsible for providing accurate

and timely financial statements of the Federal

Government, principally through the publication

of the Daily Treasury Statement, the Monthly

Treasury Statement, the Annual Report of the U.S.

Government (formally the Combined Statement of

Receipts, Outlays, and Balances of the United States

Government), and the Financial Report of the U.S.

Government.

Means and Strategies

DO, working with FMS, will make the management of the Federal Government’s cash program

more efficient and effective by continually enhancing the government’s cash management systems

and improving and formalizing models for projecting the government’s cash position.

FMS will continue to place increased emphasis on

improving the quality, timeliness and integrity of

the Federal Government’s financial data. FMS’

Government-wide Accounting Modernization

Project will improve the reliability, timeliness, and

exchange of financial information between FMS,

Federal Program Agencies (FPAs), the Office of

Management and Budget, and the banking

community. This new system will improve the

reliability and timeliness of the Government’s

financial information and provide FPAs and other

users with better access to that information.

FMS will continue its work with the FPAs to

adopt uniform accounting and reporting standards

and systems. FMS will develop a governmentwide infrastructure to standardize definitions of

federal accounting terms and their usage, and

provide to agencies an interactive U.S. Standard

General Ledger website and database. During

FY 2002, the Federal Government’s cash position,

budget surplus, and deficit information was on

schedule and accurate 100 percent of the time.

FMS is working to continue that consistency.

DO leads the effort to establish best practices for

U.S. Government financial reporting, and to make

the U.S. Government financial report a model for

forward-looking financial reporting. Treasury is

exploring ways in which to issue a guide to government financial reports that would help citizens

interpret and understand U.S. Government

financial reporting.

FMS, with OMB and GAO, is developing a new

process for preparing the consolidated Financial

Report of the U.S. Government. The new process,

which it will use for the FY 2004 Financial Report,

will prepare the Financial Report from agency

financial statements and other relevant financial

information, and strengthen control over intragovernmental transactions. FMS will continue to

work cooperatively with GAO, OMB, and program

agencies to eliminate the issues that prevent an

unqualified opinion on the Financial Report of the

United States Government.

Although some issues are outside the scope of

FMS, FMS will continue to assist agencies by

providing guidance and support and enhancing

processes it oversees. FMS is developing a new

process for preparing the Financial Report to meet

the new accelerated timeframe set forth by OMB,

and enhance the integrity of the Report. When

implemented, the new process and new intragovernmental business rules will mitigate the

material weaknesses in the current process.

BPD will improve the clarity, utility and availability of federal debt financial information; support

and influence the FMS initiative to modernize

government-wide accounting; and actively participate in the development of federal debt and loans

receivable accounting standards.

Measuring Success

We will measure the:

• Net cost of cash balances;

• Readability and accessibility of financial statements (via outside, independent assessment); and

• Timeliness of financial statements.
30 Department of the Treasury

The Department of the Treasury strives to promote

national prosperity through economic growth and

job creation; maintains public trust and confidence

in our economic and financial systems; and ensures

that it has the workforce, technology, and business

practices to meet the nation’s needs effectively and

efficiently.

We will realize our Strategic Goals by building a

strong institution that is citizen-centered, resultsoriented, and actively promotes innovation

through competition. Treasury will work effectively and efficiently to implement the President’s

Management Agenda and continuously improve

our internal business operations.

All Treasury bureaus have means, strategies, and

success metrics to drive their performance, achieve

their performance goals, and become world class in

management practices. The means and strategies

describe a Treasury-wide framework that provides

guidance to our policy offices, operating bureaus,

and our most import asset, our employees.

Strategic Goal M5 – Ensure professionalism,

excellence, integrity and accountability in the

management and conduct of the Department of

the Treasury (M5)

The Department of the Treasury has a diverse

portfolio of products and services. We are strengthening the communication and relationships

between our policy offices and the operating

bureaus to focus on meaningful business results,

with an emphasis on improving financial management.

We are strategically aligning Treasury policies,

business plans, programs and resources to achieve

meaningful business results. The Treasury Strategic

Plan for FY 2003 – 2008 and its implementation

reflects this alignment. From senior leadership to

management levels to line staff, the Treasury

workforce was engaged to develop an integrated

plan in which policies and operations aligned.

Continuing efforts to further align these elements

are accomplished through regular meetings,

integrated performance and budgeting, and a

refocusing on our core businesses.
Strategic Plan • Fiscal Years 2003-2008 31

Key Partners in Achieving this Goal:

All bureaus, external evaluators, and other agencies

are partners with Treasury in achieving the

President’s Management Agenda and driving

Treasury to achieve world class performance.

Key Factors Affecting Achievement of this

Goal:

The alignment of policies, business plans, programs and resources will present opportunities to

strengthen the Deparment of the Treasury.

Strategic Objective M5A – Protect the

Integrity of the Department of the

Treasury

Treasury is committed to preserving and protecting

the integrity of the Department, its programs,

policies and initiatives. The independent efforts of

an inspector general to ensure fairness, integrity,

independence, objectivity, proficiency and due care

in performing our work in all of Treasury, including its bureaus serve to detect and prevent misconduct and mismanagement by personnel and

programs. Their audits, inspections and oversight

are continuously addressed and contribute to

taking corrective actions and improving our

efforts. The Treasury Bureaus rely on independent

audits, inspections and oversight in their ongoing

program evaluations.

We will ensure fairness, integrity, independence,

objectivity, proficiency, and due care in performing

our work. We will protect the integrity of our

programs, our operations and our management.

Means and Strategies

All Treasury entities rely on the advice, guidance,

and counsel of a variety of independent audits and

auditors, evaluations and evaluators, both internal

and external to point out weaknesses, recommend

improvements, and provide oversight. We will

continue to act appropriately and efficiently,

making changes and adjustments as needed.

Strategic Objective M5B – Manage

Treasury Resources to effectively to

Accomplish the Mission and Provide

Quality Customer Service

The President’s Management Agenda (PMA)

provides a viable framework upon which to achieve

this objective, achieve world-class excellence, and

deliver on results that matter. We will:

• Strengthen workforce management to provide

the leadership capacity, people tools and

technology to ensure a diverse workforce

committed to excellence

• Achieve efficient and effective competition

from all sources to achieve our mission in the

most cost effective manner;

• Improve financial performance;

• Expand electronic government; and

• Integrate budget decisions with performance

assessment to ensure Treasury is cost effectively

delivering results for the American people.

❖ Strengthen Workforce Management to

Provide the Leadership Capacity, People,

Tools, and Technology to Ensure a Diverse

Workforce Committed to Excellence

Treasury will strategically manage its workforce by

aligning human capital strategies to agency

mission, core values, goals, and objectives. We will

use strategic workforce planning and flexible tools

to recruit, retain, and reward employees, thus

developing a diverse, high-performing workforce.

We will inventory the core competencies needed to

meet our goals and objectives and determine the

best resources to achieve desired results. We will be

flexible in our options, including competitive

sourcing to provide the best value to American

citizens. We acknowledge as an organization that

all managers are responsible and accountable for

the effective management of human capital.
32 Department of the Treasury

Means and Strategies

Treasury is actively working to enhance the

diversity and skills of its workforce through several

initiatives:

• Realign human capital to provide optimal service

at the best value to taxpayers

Human Resources (HR) is taking steps to

align Treasury’s workforce with its objectives

and meeting its performance goals in a cost

effective manner. HR is optimizing its

workforce by consolidating HR services and

redesigning Treasury HR to move to a more

strategically focused operation and increase the

span of control. We continually evaluate

opportunities to improve efficiency and

performance by opening activities to competition, and potentially outsourcing them to the

private sector.

• Provide professional development opportunities

and assure continuity of leadership and knowledge through succession planning

Treasury continues to make progress in the

area of executive development as we work to

further develop an effective leadership cadre

with the competencies necessary to lead the

Department. Among other initiatives, we have

implemented an OPM-approved candidate

development program for the merit-based

selection of individuals with leadership

potential, expanded the Treasury Executive

Leadership Program (TELP) to include GS-15

employees, and begun to develop individual

development plans for leadership and staff.

Treasury will create a comprehensive succession planning program that will incorporate

and integrate these existing initiatives with

other HR systems.

• Implement an effective performance management

system

Treasury is committed to providing employees

with challenging work, honest feedback, and

opportunities for growth, and recognizing and

rewarding delivered results. A key element is

building a performance management system

that effectively differentiates between high and

low performance, and links individual and

team performance to organizational goals.

• Work to sustain a diverse workforce, especially in

mission-critical occupations and leadership

positions

Treasury continues to reduce diversity gaps in

critical occupations. We have created a new

on-line workforce analytical tool that gives

managers and leaders direct access to a variety

of standard reports on race, sex, national origin,

and disability data on Treasury employees.

• Become a competency-based organization,

especially in the area of financial performance

We are working to enhance required competencies for mission-critical occupations,

identifying skill gaps, and working to fill

them. We are pursuing this effort at both a

corporate level and within the bureaus. Our

next critical steps will be to identify training

opportunities to support competency development, and institute annual bureau gap analysis

and plans.

• Manage our human capital by data-driven

measurable outcomes

Treasury is developing the tools and processes

necessary to measure and rate our performance

on achieving our workforce goals. Treasury’s

Human Capital Action Plan serves as the

agency’s human capital accountability system.

The expectations of the Assistant Secretary for

Management and CFO for human capital

communicates accountability and

management’s role in achieving success. To

further track our successes, we developed a

web-based tracking dashboard for monitoring

agency progress. We will incorporate OPM

measures in our process and explore partnership opportunities with the IRS to develop
Strategic Plan • Fiscal Years 2003-2008 33

Treasury specific standards. We will link SES

performance standards with human capital

accountability and develop tools to assess

leadership effectiveness.

• Promote safety, health and environmental

protection for our workforce

The health of our workforce is an important

concern. We communicate to our workforce

procedures promoting safety and health and

for preventing environmental issues. We

conduct physical site assessments of office

building and other locations as well as behavior

operations evaluations; and develop programs

to reduce the frequency and severity of illness/

injury, property, and tort claims losses.

Measuring Success

We will measure our success by the:

• Effectiveness of our performance management

system;

• Number of positions having succession plans;

• Diversity and skills of our workforce;

• Reduction in the number of lost production days;

and

• Reduction in the lost time injury and illness rates.

❖ Achieve Efficient and Effective Competition

From all Sources to Achieve Our Mission

and Goals in the Most Cost Effective

Manner

To deliver services effectively and at the lowest cost

possible to American taxpayers, Treasury will look

both internally and externally for the most efficient

ways to achieve its mission, opening up for

competition our processes and activities as appropriate.

Means and Strategies

Treasury has developed processes and infrastructure to support our competitive sourcing program

and will continue to refine these processes in the

future. We will also continue to assist in creating a

government-wide infrastructure for competitive

sourcing. Treasury’s largest bureau, IRS, will

increase its competitive sourcing staff in order to

expand the number of competitions that it conducts. Other Treasury bureaus will leverage the

growing capacity of the Department for guidance

and assistance to implement their programs and

supervise their related competitions.

We will continue to reduce the time necessary to

complete competitions as we incorporate the

lessons learned from previous competitions, and

develop an experienced cadre of procurement and

competitive sourcing program managers. Treasury

will measure and track the cost and productivity

implications of completed competitions to focus

our efforts, improve competition structuring and

management, and ensure that completed competitions achieve their stated objectives.

Measuring Success

We will measure the percentage of full-time

equivalent employees (those listed on the approved

FAIR Act inventories) who have been subject to

public-private competitions. We will also measure

the number of annual competitions, as well as the

estimated savings and productivity implications

from the completed competitions.

❖ Improve Financial Performance

Treasury will build or procure financial systems

that produce accurate and timely information to

support operating, budget, and policy decisions.

Treasury is taking a government-wide lead in

accelerating financial reporting and will continue

to lead the Administration’s effort to improve

monthly, quarterly, and year-end accounting close
34 Department of the Treasury

process and procedures. As part of this effort,

Treasury has made, and is continuing to make

significant improvements in the performance of its

Franchise and Working Capital Funds.

Means and Strategies

• Meet accelerated November 15 deadline for

audited financial statements

Treasury has already met this goal as identified

in the FY2002 Performance and Accountability Report. We will further streamline our

financial reporting processes and strengthen

our accounting practices in to continue to

meet this goal in future years.

• Use financial and performance information

consistently during operational evaluation and

decision-making

Treasury is pursuing several opportunities to

expand its performance management system to

collect and link with financial data from

Treasury’s financial system. In addition,

Treasury is working with bureaus to develop

cost centers that would collect and consolidate

financial data by program. Treasury will use

these improved sources of financial and

performance information to support effective

operational evaluations and decision-making.

• Track and report monthly performance metrics,

and make them available on-line

Treasury will implement the government-wide

metrics for measuring performance in each of

several financial performance areas, including

travel and purchase card programs, delinquent

accounts receivable, non-credit card invoices,

and electronic payments. We will use metrics

to evaluate performance against goals in these

areas, helping to focus operational improvement efforts and hold managers accountable.

• Maximize the effectiveness and efficiency of the

Treasury Franchise and Working Capital Funds

In its Franchise and Working Capital Funds,

Treasury is promoting efficiencies in the

delivery of products and services by introducing competition among service providers,

while increasing the breadth of our competitive area across the Federal Government. We

are examining our service providers and

product offerings and consolidating or eliminating those that are redundant. We are

holding each business line accountable for

revenues and expenses, and full cost/self

sufficiency, reporting product costs. We are

enhancing customer satisfaction by measuring

results from our customers, stakeholders, and

employees and holding managers accountable

for their performance.

• Other initiatives

Treasury will continue to encourage bureaus to

monitor and control the level of improper

payments. To further this effort, we will survey

Treasury bureaus for risk assessments, results,

and action plans to reduce improper payments.

Treasury will build on its success at receiving

clean audit opinions, and will ensure that the

processes and systems (e.g., the three-day

close) stay in place to maintain clean audit

opinions in the future.

Treasury will continue its aggressive efforts to

close both auditor-identified and Integrity Act

weaknesses, and to maintain integrated

financial systems that provide timely and

reliable financial information.

Treasury will enhance the processes and controls to

disburse agency funds in strict accordance with

appropriations law.
Strategic Plan • Fiscal Years 2003-2008 35

Measuring Success

The consistency of clean audit opinions on our

annual financial statements is a key metric of

success. We will measure the number of days it

takes to close our monthly statements, and our

ability to deliver on the accelerated deadline for

audited financial statements. Our evaluation of our

financial performance metrics will be used to

influence management decision-making and

operational improvements. We will measure

success through our efforts to:

• Use financial and performance information

consistently during operational evaluation and

decision-making;

• Track and report monthly financial performance

metrics; and

• Maximize the effectiveness and efficiency of the

Treasury Franchise and Working Capital Funds.

❖ Expand Electronic Government

Treasury-wide IT governance is the CIO’s highest

priority. With rigorous IT governance enterprisewide, Treasury will be able to allocate resources

effectively and deploy the IT infrastructure and

enterprise services needed for an integrated,

reliable, secure, and easy-to-use suite of Treasury eGovernment services.

The refined Treasury IT governance framework

consists of four pillars:

• Structure. A cornerstone of the governance

framework is the newly established Technology

Investment Review Board (TRIB) that sets

Treasurywide IT priorities, evaluates prospective IT investments, tracks past investments,

and makes recommendations to the Capital

Investment Review Board (CRIB).

• Process. Working closely with the CFO, the

CIO is increasing the level of the OCIO’s

engagement in the budget process. This will

ensure that the Treasury CFO reviews the

highest quality business cases possible.

• Technology. The CIO is seeking to deploy a

limited number of simple, cost-effective, and

highly practical portfolio management tools to

improve investment program visibility,

tracking, and manageability.

• Culture. Promoting the necessary cultural

changes associated with IT governance is vital,

and will continue to be a high priority in the

Department.

Means and Strategies

Treasury has several initiatives underway to expand

its use of electronic government:

• Focus IT spending on high priority modernization initiatives

Treasury’s mission and objectives are the

foundation for our IT strategy and guide our

IT spending. Treasury’s ongoing plan for

technology modernization supports the

mission of the Department, including financial management, economic policy, and

initiatives to disrupt terrorist financing. We

will identify high priority enterprise solutions

to eliminate duplicative and overlapping assets.

Treasury has numerous IT initiatives underway

to deliver new and improved e-Government

services.

1. Ensure major IT projects are within 10 percent

of cost/schedule/performance objectives. To ensure

cost effective management of the Treasury IT

portfolio, the Department will refine its IT

governance system. The new IT governance

system will achieve four key goals:

2. Develop projects in manageable units. Treasury

will promote modular, performance-based

contracts that offer flexibility in expanding or

reducing projects as outcomes require.

3. Include an Earned Value Management System

(EVMS) in all contracts. Treasury will require

vendors to provide this data as part of the

project management and implementation

process.
36 Department of the Treasury

4. Deploy a portfolio management system to track

major IT projects. Refining the tools supporting portfolio management is a CIO priority.

The focus will be on ensuring the most

appropriate mix of IT Assets to address

Departmental mission; infrastructure

compatability; and managing to cost. schedule

and performance.

5. Use project metrics to indicate when corrective

actions are required. Treasury will rely on

agreed-upon performance measures tracked by

the “Executive Dashboard,” to determine

when the Department should force

remediation of a project, to terminate it, or to

allocate additional funding.

6. Meet OMB IT security performance measures.

Treasury’s IT Security Office has initiated a

new management process to achieve the high

performance measures expected of the Treasury, and will aggressively certify and

accreditate systems.

7. Contribute to, and participate in, governmentwide e-Gov initiatives. Treasury will continue

to be a significant partner in the Federal EGov initiatives, both contributing its experience and expertise and participating in the

development of government-wide initiatives

when appropriate.

Measuring Success

We will measure the proportion of projects that

operate within 10 percent of cost and performance

targets. We will track the number of duplicative

and overlapping systems we have eliminated, the

percentage of systems we have certified and

accredited, and the number of government-wide

e-Gov initiatives we contribute to or participate in.

❖ Integrate Budget Decisions with

Performance Assessment to Ensure Treasury

is Cost Effectively Delivering Results for the

American People

The Department of the Treasury has an enormous

responsibility and a diverse portfolio of products

and services. Therefore, we must systematically

assess the performance of the different programs

we are managing for the American people. We

must clearly identify those that provide a greater or

lesser “return on investment,” in terms of costeffective results, and make our resource allocations

decisions appropriately.

Means and Strategies

Treasury has several strategies to further integrate

performance assessment into the budget process:

• Complete Program Assessment Rating Tool

(PART) ratings for all programs, and expand use

of Treasury’s internal PART-like tool

PART is a tool OMB uses to gauge program

performance. OMB is continuing to select

specific Treasury programs to be rated using

this tool. In addition, the Treasury has

developed and uses a PART-like approach to

evaluate all its programs. Treasury first

implemented this tool during the FY 2004

performance budget process to evaluate

bureaus’ performance budget requests, and is

aggressively rolling it out to all programs.

Treasury’s Office of Performance Budgeting is

conducting training for the bureaus on how to

developing strategic and performance goals,

measures, and targets that are outcome

oriented and meaningfully reflect the mission

of the program. We also provide guidance on

OMB’s PART process at monthly Treasurywide CFO, budget and planning meetings.

The Treasury will meet individually with “atrisk” bureaus that need greater assistance with

improving goals and measures and/or integrating budget with performance.
Strategic Plan • Fiscal Years 2003-2008 37

• Make performance measures more focused and

useful to policy makers

Treasury will continue efforts to reduce the

number of its workload metrics, having in

place the existing and new outcome oriented

and efficiency measures that will improve

focus and effectiveness. We will continue

aggressively working with our bureaus to

establish high-level, meaningful performance

measures for each program.

• Require managers at all levels to regularly use

performance measure information when

making decisions

Treasury has implemented a reporting system

to track the results of bureaus’ performance

and will continue its initiative to require

managers to use monthly performance data

and month-end financial reports to assess

Treasury’s progress in achieving its goals and

detect performance issues and trends requiring

senior management intervention.

In addition, Treasury will require senior

managers to meet quarterly to discuss their

assessments of the financial and performance

information and identify issues requiring

further action. Managers, however, will be

accountable for immediately notifying senior

management of significant performance issues

to ensure timely resolution of any issues or

problems.

• Improve ability to accurately report the full cost of

achieving performance goals, and the marginal

cost of changing performance goals

Treasury has taken significant steps to restructure its budget office and processes, and will

continue to build on this initiative to consolidate strategic planning, budget formulation,

and budget execution staff and functions

under one office. The integration of these

functions has significantly improved Treasury’s

ability to collectively establish a performancebased budget and coordinate the review and

reporting of our financial and performance

data.

To improve Treasury’s accuracy of reporting

costs by program, the Department is pursuing

opportunities to expand its existing performance system to collect and/or link it with

Treasury financial data. In addition, Treasury

is working with bureaus to establish cost

centers that will collect and consolidate

financial data by program.

• Incorporate the impact of PART ratings into

budget submissions and justifications, and

ensure all Treasury programs use PART evaluations to direct program improvements

Treasury bureaus must reference PART in justifying resources for PARTed programs. Treasury will

continue to use its PART-like criteria and process

to review bureaus performance budget requests.

Treasury’s review process will include rigorous

review of bureaus’ capital investment plans. In

addition, Treasury’s reviews of bureau performance and financial data will enable timely

detection of management action and/or legislative

proposals needed to effectively direct program

improvements.

Measuring Success

We will measure:

• The results of programs PARTed by OMB and

the Treasury internal PART-like tool;

• Number of outcome and efficiency performance

goals and measures;

• Number of budget submissions and justifications

that effectively incorporate performance and

budget data; and

• Accuracy of our ability to report the full and

marginal cost of achieving or changing our

performance goals.
38 Department of the Treasury
Strategic Plan • Fiscal Years 2003-2008 39

APPENDICES

A. Crosswalk of Treasury Strategic Goals, Strategic Objectives, and Bureau

Goals

B. Executive Summaries of Bureau Plans

C. Table of Cross-Cutting Issues and Linkages to Partners

D. Program Evaluations

E. Glossary of Terms and Acronyms

Strategic Plan • Fiscal Years 2003-2008 A1

A. Crosswalk of Treasury Strategic Goals,

Strategic Objectives, and Bureau Goals

Economic Focus

Treasury Strategic Goal: Promote Prosperous U.S. and World Economies (E1)

Treasury Objective Related Bureau Goals

Stimulate economic growth Community Development Financial Institutions Fund (CDFI)

and job creation (E1A) • Improve the economic and living conditions of underserved communities by

providing an array of community development financial services through a

nationwide network of regulated and nonregulated CDFIs and CDEs.

Departmental Offices (DO)

• Promote economic growth world-wide.

• Increase free trade and cross-border investment.

Provide a flexible legal Office of the Comptroller of the Currency (OCC)

and regulatory • A flexible legal and regulatory framework that enables the national banking

framework (E1B) system to provide a full competitive array of financial services.

Office of Thrift Supervision (OTS)

• A flexible legal and regulatory framework that enables the thrift industry to

provide a full competitive array of financial services.

Improve and simplify Departmental Offices (DO)

the tax code (E1C) • Reduce the cost of compliance for business and individuals through simplifying,

 rationalizing and streamlining the tax code.

• Improve the tax code to make is simpler, more economically neutral, fairer, and

more conducive to economic growth.

Treasury Strategic Goal: Promote Stable U.S. and World Economies (E2)

Treasury Objective Related Bureau Goals

Increase citizens’ Alcohol and Tobacco Tax and Trade Bureau (TTB)

economic security (E2A) • Prevent consumer deception, ensure that regulated alcohol and tobacco products

comply with Federal commodity, safety, and distribution requirements, and

provide high quality customer service.

Departmental Offices (DO)

• Protect personal financial information.

• Ensure that Americans have access to financial education programs that help

them obtain practical knowledge and skills to make informed financial choices

throughout their lives.

Improve the stability of Departmental Offices (DO)

the international financial • Ensure responsible stewardship of federal funds invested by international

system (E2B) financial institutions.
A2 Department of the Treasury

Treasury Strategic Goal: Preserve the Integrity of Financial Systems (F3)

Strategic Objectives Related Bureau Goals

Disrupt and dismantle Departmental Offices (DO)

financial infrastructure of • Identify, trace and freeze financial assets of terrorists and other financial criminals.

terrorists, drug traffickers

and other criminals Financial Crimes Enforcement Network (FinCEN)

and isolate their support • Collect, analyze, and share information needed to combat the financial aspects

networks (F3A) of criminal activity worldwide.

Internal Revenue Service (IRS)

• Top quality service to all taxpayers through fair and uniform application of the

law.

Execute the Nation’s Departmental Offices (DO)

financial sanctions • Strengthen coordination and cooperation to effectively enforce financial

policies (F3B) sanctions policies globally.

Increase the reliability Bureau of Engraving and Printing (BEP)

of the U.S. financial • Satisfy the Federal Reserve Board and the public by providing responsive

system (F3C) service and quality products.

• Manufacture state-of the-art currency of consistently high quality while

 improving productivity and cost performance.

• Produce state-of-the-art currency that deters counterfeiting, contributes to public

 confidence, facilitates daily commerce and extends the useful life of notes in

 circulation.

• Ensure an environment of comprehensive security and accountability for the

 Bureau’s personnel, facilities and products.

Departmental Offices (DO)

• Administer and evaluate the Terrorism Risk Insurance Program.

• Implement critical infrastructure protection policies.

U.S. Mint (MINT)

• Design, sell and deliver quality products.

Office of the Comptroller of the Currency (OCC)

• A safe and sound national banking system.

• Fair access to financial services and fair treatment of bank customers.

Office of Thrift Supervision (OTS)

• A safe and sound thrift industry.

• Fair access to financial services and fair treatment of thrift customers.

Financial Focus
Strategic Plan • Fiscal Years 2003-2008 A3

Treasury Strategic Goal: Manage the U.S. Government’s Finances Effectively (F4)

Strategic Objectives Related Bureau Goals

Collect federal tax Alcohol and Tobacco Trade and Tax Bureau(TTB)

revenue when due, • Provide the most effective and efficient system for the collection of all revenue that

through a fair and is rightfully due, eliminate or prevent tax evasion and other criminal conduct,

uniform application of and provide high quality service while imposing the least regulatory burden.

the law (F4A)

Departmental Offices (DO)

• Ensure fair administration of the tax code.

Financial Management Service (FMS)

• Provide timely collection of Federal Government receipts, at the lowest cost,

through an all-electronic Treasury.

• Maximize collection on government delinquent debt by providing efficient and

effective centralized debt collection services.

Internal Revenue Service (IRS)

• Top quality service to all taxpayers through fair and uniform application of the law.

• Top quality service to each taxpayer in every transaction.

Manage federal debt Bureau of Public Debt (BPD)

effectively and efficiently • Effectively finance government operations.

(F4B)

Departmental Offices (DO)

• Achieve “lowest cost” financing over time.

Financial Management Service (FMS)

• Provide timely collection of Federal Government receipts, at the lowest cost,

through an all-electronic Treasury.

Make collections and Financial Management Service (FMS)

payments on time and • Provide federal payments in a timely and accurate manner, move toward an

accurately, optimizing use all-electronic Treasury for payments, and determine the optimal payment

of electronic mechanisms processing environment for the future.

(F4C) • Provide timely collection of Federal Government receipts, at the lowest cost,

through an all-electronic Treasury.

Optimize cash Bureau of Public Debt (BPD)

management and • Effectively account for the debt of the Federal Government.

effectively administer the

government’s financial Departmental Offices (DO)

systems (F4D) • Make accurate, timely financial information on U.S. Government programs

readily available.

Financial Management Service (FMS)

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

reports which contribute to improve 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’s internal operations and support to government agencies.

Financial Focus
A4 Department of the Treasury

Internal Management Focus

Treasury Strategic Goal: Ensure Professionalism, Excellence, Integrity and Accountability in the

Management and Conduct of the Department of the Treasury (M5)

Strategic Objectives Related Bureau Goals

Protect the integrity of the • Ensure fairness, integrity, independence, objectivity, proficiency, and due care in

Department of Treasury all functions and responsibilities. Audits, investigations and independent

(M5A) oversight are the mechanisms through which Treasury, including the

bureaus, ensure that we operate in an appropriate manner.

Manage Treasury • Strengthen workforce management to provide the leadership capacity, people,

resources effectively to tools and technology to ensure a diverse workforce committed to excellence.

accomplish the mission • Achieve efficient and effective competition from all sources to achieve our

and provide quality missions in the most cost effective manner.

customer service (M5B) • Improve financial performance.

• Expand electronic government.

• Integrate budget decisions with performance assessment to ensure Treasury is

cost effectively delivering results for the American People.
Strategic Plan • Fiscal Years 2003-2008 B1

B. Executive Summaries of Bureau Plans

These executive summaries capture the Bureau’s mission, goals, objectives and major programs.

 Complete bureau plans are available on the bureau web sites.

Alcohol and Tobacco Tax and Trade Bureau (TTB)......................................www.ttb.gov

Bureau of Engraving and Printing (BEP) .................................... www.moneyfactory.gov

Bureau of the Public Debt (BPD) ........................................... www.publicdebt.treas.gov

Community Development Financial Institutions (CFDI) ................... www.cdfifund.gov

Financial Crimes Enforcement Network (FinCEN) ............................... www.fincen.gov

Financial Management Service (FMS)................................................ www.fms.treas.gov

Internal Revenue Service (IRS)..................................................................... www.irs.gov

U. S. Mint (Mint) ................................................................................. www.usmint.gov

Office of the Comptroller of the Currency (OCC) ............................. www.occ.treas.gov

Office of Thrift Supervision (OTS) ......................................................www.ots.treas.gov
B2 Department of the Treasury

Alcohol and Tobacco Tax and Trade Bureau (TTB)

Mission

TTB’s mission is to collect alcohol, tobacco,

firearms and ammunition excise taxes; to ensure

that alcohol beverages are labeled, advertised, and

marketed in accordance with the law; and to

administer the laws and regulations in a manner

that protects the revenue, protects the consumer,

and promotes voluntary compliance.

Overview/Background

The Alcohol and Tobacco Tax and Trade Bureau

(TTB) is the newest agency in the Department of

the Treasury, created when the Homeland Security

Act of 2002 divided the Bureau of Alcohol,

Tobacco and Firearms was into two agencies. TTB

will retain responsibility for administering alcohol

and tobacco laws and implementing regulations,

as well as the statutes that impose federal excise

tax on firearms and ammunition. While the

agency has a new name, the history of TTB’s

regulatory responsibility dates back to creation of

the United States Department of the Treasury and

the first federal taxes being levied on distilled

spirits in 1791.

Bureau Strategic/General Goals

(Bolded goals are incorporated in the Corporate

Treasury Strategic Plan.)

• Collect the Revenue – Provide the most

effective and efficient system for the collection

of all revenue that is rightfully due, eliminate

or prevent tax evasion and other criminal

conduct, and provide high quality service

while imposing the least regulatory burden

• Protect the Public – Prevent consumer

deception, ensure that regulated alcohol and

tobacco products comply with Federal commodity, safety, and distribution requirements,

and provide high quality customer service.

• Refine Management Practices - Ensure that all

TTB programs operate at optimum efficiency

and effectiveness and with full accountability, by

providing high quality management and

administrative support.

Bureau Means and Strategies

TTB administers federal tax laws on alcohol,

tobacco, firearms, and ammunition. The entities

that produce and import the taxable commodities

regulated by TTB include major contributors to

the U.S. economy. TTB must be responsive to

their customers’ needs by reducing delays and

regulations that impede business and do not

improve TTB’s ability to collect the revenue.

TTB enforces federal laws related to the production and distribution of alcohol and tobacco

products through education, inspection, laboratory testing, and investigation. TTB works with

industry, state governments, and other interested

parties to facilitate compliance with regulatory

requirements. TTB provides technical expertise,

training, information, and research results to

industry members, government agencies, and

others in order to better protect and serve the

public.

Major Programs

Application Program - Keeping ineligible persons

from entering the industry is key to TTB’s

mission. The tobacco and alcohol industries have

the potential to be highly lucrative through illicit

activity in these commodities, and therefore,

terrorists and organized crime must be kept out of

these industries. TTB’s National Revenue Center

receives over 3,000 original applications for

various permits annually. To ensure that only

eligible persons enter into the business, TTB

conducts personnel and financial background

investigations, and inspects the premises to be

used for the operations are inspected.

Revenue Collection Program – A field approach

that uses analysis to target non-compliant industry

members and establishes an identifiable presence

within industry that encourages voluntary compliance is key to collecting revenue that is due (TTB

collects approximately $15 billion annually).

TTB is developing several electronic-filing

strategies to enable regulated industry members to

conduct business with TTB via the Internet. TTB

keeps industry members and the public informed
Strategic Plan • Fiscal Years 2003-2008 B3

on laws and regulations and pending issues

through a variety of media, including the Internet,

seminars, and surveys.

COLAs Online - TTB enforces the Federal

Alcohol Administration Act, which requires

importers and bottlers of beverage alcohol to

obtain certificates of label approval or certificates

of exemption from label approval (COLAs) for

most alcoholic beverages prior to introducing

them into interstate commerce. TTB acts on these

COLAs to ensure that producers lavel products in

accordance with federal laws and regulations

aimed at protecting the consumer. In 2003, TTB

launched a web-based and entirely paperless

system called COLAs Online that gives alcohol

industry members and third party filers the option

to file these applications via the TTB web site.

This system will also provide a way for TTB to

process the application, return approved or

rejected COLAs to applicants, and provide

notification of approval or rejection electronically.

Alcohol Beverage Sampling Program - TTB collects

hundreds of alcohol product samples annually

from the marketplace for laboratory analysis. The

sampling program includes samples collected

directly from producers and bottlers. Through this

program, we randomly sample products and have

discovered that some products selected and tested

are non-compliant for various reasons.

Trade Practices Program – The Federal Alcohol

Administration Act imposes extensive trade

practice requirements on the alcohol beverage

industry. TTB investigates anti-competitive

business practices between alcohol beverage

suppliers and retailers to preserve the retailer’s

economic independence and protect the consumer.

International Trade Assistance – TTB works with

other federal agencies and the Office of the

United States Trade Representative (USTR) to

provide technical expertise on regulatory issues

involving international trade in alcoholic beverages and resolve alcohol trade issues by both

monitoring and facilitating U.S. trade. TTB does

this by representing the Department of the

Treasury in technical discussions with various

international trade organizations. Discussions

usually focus on issues of mutual concern to the

U.S. and the European Union as well as to other

alcohol producing countries.
B4 Department of the Treasury

The Bureau of Engraving and Printing (BEP)

Mission

BEP’s core mission is to design and manufacture

high quality security documents that meet

customer’s requirements for quantity, quality, and

performance and deter counterfeiting.

Overview/Background

The Bureau of Engraving and Printing has been in

operation for more than 139 years. Created by an

Act of Congress in 1861, the Bureau came into

existence a year later to print federal paper

currency starting with one dollar and two dollar

currency notes.

The Federal Reserve is the Bureau’s primary

customer and, with the phase out of postage

stamp production in 2005, will account for

approximately 97 percent of all revenue. The

current manufacturing facilities in Washington,

D.C. and Forth Worth, Texas employ approximately 2600 individuals.

Bureau Strategic/General Goals

(Bolded Goals are included in the Corporate Treasury

Strategic Plan)

• Satisfy the Federal Reserve Board, the

Postal Service and the public by providing

responsive service and quality products.

• Manufacture state-of-the-art currency of

consistently high quality while improving

productivity and cost performance.

• Produce state-of-the-art currency that deters

counterfeiting, contributes to public confidence, facilitates daily commerce, and

extends the useful life of notes in circulation.

• Ensure an environment of comprehensive

security and accountability for the Bureau’s

personnel, facilities and products.

• Manage the Bureau’s resources to increase

efficiency and effectiveness in support of the other

strategic goals.

Bureau Means and Strategies

BEP is building and acquiring the resources

needed to meet the projected design, quality, and

quantity requirements for its products over the

next five years. This includes security and accountability, asset management, information

technology, and human resources. BEP’s Strategic

Plan emphasizes modernizing and streamlining

the Bureau’s infrastructure through facility

renovations, including the addition of a tour at

the Western Currency Facility, expansion for

process modification, production equipment

upgrades and replacement, and environmental

control system upgrades, and expansion. The

Bureau also has a strategic initiative to ensure the

continuity of operations of essential functions in

the event of an emergency.

BEP’s Strategic Plan emphasizes two resource

areas critical to success in today’s competitive

environment — information technology (IT) and

human resources (HR). The Bureau will leverage

technology and employ appropriate government

and Treasury e-Gov initiatives to increase the

efficiency and effectiveness of the Bureau’s production, financial, and accountability systems and

to enhance BEP’s service to our customers and

business partners. As a prerequisite for the

achievement of all these goals, the Bureau must

have a capable, motivated workforce with the

skills required for 21st century manufacturing.

The human resources components of the plan

ensure that the Bureau maintains such a

workforce.

Major Programs

Manufacturing

Protection and Accountability of Assets

Resource Management
Strategic Plan • Fiscal Years 2003-2008 B5

Bureau of the Public Debt (BPD)

Mission

BPD’s mission is to borrow the money needed to

operate the Federal Government and to account

for the resulting debt.

Overview/Background

The job of Public Debt is large and varied. BPD

effectively regulates the primary and secondary

Treasury securities markets; ensures that reliable

systems and processes are in place for purchasing

and transferring Treasury securities; annually

auctions and issues, $2 trillion of marketable

securities, issues and redeems more than 100

million savings bonds each year; maintains more

than $400 billion in securities accounts directly

for investors; and provides timely and accurate

information on the public debt.

Bureau Strategic/General Goals

(Bolded Goals are incorporated in the Corporate

Treasury Strategic Plan)

• Effectively finance government operations

• Effectively account for the debt of the

Federal Government

• Fulfill customer expectations

Bureau Means and Strategies

BPD uses the following strategies to achieve

Bureau Strategic Goals:

• Effectively educate our customers and the

securities market on the terms, conditions,

and risks of Treasury securities.

• Simplify the regulations and procedures that

our customers must follow to conduct

business with us.

• Make and receive as many of our payments

electronically as possible.

• Encourage investors to purchase securities,

access their accounts, and conduct transactions electronically.

• Expand our use of the Internet to inform and

communicate with customers and allow them

to communicate with us.

• Use the Internet to market securities to retail

customers.

• Establish a single account relationship with

our customers for all of our retail securities

products.

• Minimize the impact of high workload

volumes on our operations and customer

service.

• Deploy technology in support of our operations using an open architecture, emphasizing

business process reengineering, and applying

the principles of rapid application development.

• Accomplish administrative transactions

electronically.

Major Programs

BPD has five major program areas:

• Wholesale Securities Services

• Government Agency Investment Services

• Retail Securities Services

• Summary Debt Accounting

• Franchising
B6 Department of the Treasury

Community Development Financial Institutions Fund

(CDFI)

affordable financial services and financing. If the

conditions for prosperity and stability for all

Americans we must address these gaps in financial

service availability.

CDFIs and CDEs are specialized, regulated, and

non-regulated financial service providers whose

primary mission is to fill credit gaps in

underserved communities. CDFIs and CDEs also

provide business counseling, financial education,

or other technical assistance that teach borrowers

to manage credit responsibly and help counter

predatory lending. In addition to promoting the

sustainability of community development financial institutions, the Fund provides incentives to

traditional insured depository institutions to

invest in the most underserved communities in

the country.

By supporting the network of financial institutions that serve underserved areas, the Fund

increases economic growth and creates jobs,

creates a flexible legal and regulatory framework

for its certified institutions, and increases the

reliability of the U.S. financial system. The CDFI

Fund is an integral part of Treasury’s strategy for

promoting a prosperous U.S. economy and

preserving the integrity of financial systems.

Vision

The vision of the CDFI Fund is a United States in

which all people have access to credit, capital, and

affordable financial services.

Mission

The mission of the CDFI Fund is to expand the

capacity of financial institutions to provide credit,

capital, and financial services to underserved

populations and communities in the United

States.

CDFI Fund Strategic Goal:

(Bolded goals are incorporated in the corporate

Treasury Strategic Plan.)

• Improve the economic and living conditions

of underserved communities1

 by providing

an array of community development

financial services through a nationwide

network of regulated and non-regulated

CDFIs and CDEs.

The United States has one of the best banking and

financial market systems in the world. Yet,

millions of low-income Americans and countless

distressed communities are not adequately served

by these systems. They lack convenient access to

(Footnotes)

1

 Underserved communities are communities that qualify as CDFI Program Target Markets (which include a specific geography called an Investment Area, or a specific community of people with demonstrated lack of access to credit, equity or

financial services called a Low-Income Targeted Population or an Other Targeted Population), New Markets Tax Credit

Program Low-Income Communities, or Bank Enterprise Award Program Underserved Communities. Many American Indian

Areas and similar entities qualify as underserved communities. The definition ofAmerican Indian Areas and similar entities

includes American Indian Reservations (federal and state), Off-Reservation Trust Lands; Oklahoma Tribal Statistical Areas;

Alaska Native Regional Corporations or Village Statistical Areas; and Hawaiian Homelands.
Strategic Plan • Fiscal Years 2003-2008 B7

CDFI Fund Major Programs

Community Development Financing Institutions

(CDFI) Program

The purpose of the CDFI Program is to improve

the financial position of CDFIs — particularly

those that create community development impact

in the most economically distressed areas of the

country, — increase private sector investment in

these institutions, and promote their institutional

development. The program accomplishes its

purposes by providing to CDFIs financial assistance awards that must be matched $1:$1 by nonfederal funds, and by providing technical assistance awards and training to CDFIs and CDFIs in

formation.

Bank Enterprise Award (BEA) Program

The BEA program recognizes the key role of

traditional financial institutions in community

development lending and investing. It provides

incentives for these regulated banks and thrifts to

invest in CDFIs and to increase their lending and

financial services in distressed communities.

Providing monetary rewards for community

investment activities leverages the Fund’s dollars

and puts more capital to work in distressed

communities throughout the nation.

New Markets Tax Credit (NMTC) Program

The NMTC Program is designed to spur $2

billion of private investments in a range of

privately managed investment vehicles called

Community Development Entities (CDEs).

These privately managed investment vehicles

make loans and equity investments, purchase

loans, or provide financial counseling in lowincome communities.
B8 Department of the Treasury

Financial Crimes Enforcement Network (FinCEN)

Mission

FinCEN’s mission is to collect, analyze, and share

information needed to combat the financial

aspects of criminal activity worldwide.

Overview/Background

The U.S. Department of the Treasury established

FinCEN in 1990 to provide a government-wide,

multi-source intelligence and analytical network.

FinCEN’s operation was broadened in 1994 to

include regulatory responsibilities. In October

2001, the USA Patriot Act elevated FinCEN to

bureau status and emphasized its role in fighting

terrorist financing.

FinCEN works to accomplish its mission in two

ways. First, as administrator of the Bank Secrecy

Act (BSA), our nation’s comprehensive antimoney laundering statute, FinCEN is responsible

for expanding the regulatory framework to

industries vulnerable to money laundering,

terrorist financing, and other crimes. Second,

FinCEN adds value to the BSA data by analyzing

and sharing information on money laundering

and terrorist financing trends and patterns with

law enforcement to assist their efforts in combating the financial aspects of criminal investigations.

FinCEN seeks to strike a balance between meeting

law enforcement’s information needs, minimizing

the burden on regulated industry, and protecting

individual privacy.

Bureau Strategic/General Goals

(Bolded Goals are incorporated in the Corporate

Treasury Strategic Plan)

• Collect, analyze and share information

needed to combat the financial aspects of

criminal activity worldwide.

• Support efforts to eliminate safe havens for

money laundering and terrorist financing

worldwide.

• Modernize the collection, maintenance, and

retrieval of BSA information.

• Enhance the value of FinCEN’s analytical

services and products.

Major Functions:

• Extending the Regulatory Framework

FinCEN is the nation’s central clearinghouse for

broad-based financial intelligence and information

sharing. The BSA authorized Treasury to require

covered financial institutions to file certain reports

and keep records of certain types of financial

transactions (e.g., suspicious activity reports and

currency transaction reports). As the administrator

of the BSA, FinCEN promulgates regulations,

provides outreach and guidance to the regulated

industries, and initiates regulatory enforcement

actions in certain circumstances. FinCEN relies

on its federal regulatory partners to examine

financial institutions within their respective

jurisdictions regarding compliance with the BSA.
Strategic Plan • Fiscal Years 2003-2008 B9

• Collecting and Sharing Information

As the administrator of the BSA, FinCEN manages the information the regulated industries file.

FinCEN relies on the IRS as the primary service

provider for the collection, processing, and

retrieval of BSA information. FinCEN is working

with IRS to modernize the systems and processes

used to collect, maintain, and access BSA information. These systems include the new Patriot Act

Communication System (PACS), which allows

financial institutions to file BSA reports electronically, and the Gateway process, which provides

authorized law enforcement direct, on-line access

to records filed under the BSA.

• Providing Analytical Services and Products

FinCEN adds value to financial investigations in

several ways. First, FinCEN provides case support

to U.S. law enforcement at the federal, state, and

local levels, and to international counterparts, by

preparing reports based on data collected under

the BSA, and other commercial and law enforcement information. Second, FinCEN analysts use

BSA information and other financial intelligence

to identify trends, patterns, and techniques

associated with money laundering, terrorist

financing, and other financial crimes, worldwide.

Third, under the USA PATRIOT Act, FinCEN

has initiated a program that allows law enforcement to query financial institutions, through

FinCEN, on money laundering or terrorism

investigations.
B10 Department of the Treasury

Financial Management Service (FMS)

Mission

The mission of the FMS is to provide central

payment services to federal program agencies,

operate the Federal Government’s collections and

deposit systems, provide government wide

accounting and reporting services, and manage

the collection of delinquent debt.

Overview/Background

FMS is the Federal Government’s financial

manager and, as such, oversees a daily cash flow in

excess of $50 billion; disburses 85 percent of the

Federal Government’s payments, including

income tax refunds, social security, veterans’

benefits, and other federal payments to individuals; administers the world’s largest collection

system which collects over $2.2 trillion annually;

provides cash management guidance to federal

program agencies; gathers and publishes government-wide financial information used to monitor

the government’s financial status; and, serves as

the government’s central debt collection agency

for delinquent debt.

Bureau Strategic/General Goals

(Bolded goals are incorporated in the Corporate

Treasury Strategic Plan.)

• Produce accurate, accessible, and timely

government wide financial information and

reports that contribute to improved quality

of the Nation’s financial decision making.

• Provide federal payments timely and

accurately, move toward an all-electronic

Treasury for payments, and determine the

optimal payment processing environment

for the future.

• Provide timely collection of Federal Government receipts, at the lowest cost, through an

all-electronic Treasury.

• 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.

• Maximize collection on government delinquent debt by providing efficient and

effective centralized debt collection services.

• Establish policies and processes to facilitate the

integration of e-commerce technologies into

FMS’ business programs and infrastructure.

Bureau Means and Strategies

FMS’ Strategic Plan emphasizes the importance of

our internal day-to-day operations, which touch

the lives of hundreds of millions of U.S. citizens.

FMS recognizes fully its obligation to continuously improve the reliability and timeliness of the

government’s financial information. FMS will

maintain quality standards for financial services,

expand consultative services to agencies in the

resolution of issues related to financial accounting

and reporting, and provide user-friendly and

efficient automated tools to obtain, provide, and

process information to and from customers and

stakeholders. By attending to and managing basic

business responsibilities, FMS will have the

opportunity to undertake new, challenging, and

exciting initiatives in support of the Treasury’s

overall management of the Federal Government’s

finances.

The key to FMS achieving long-term goals and

objectives lies in the teamwork, support and

commitment of its most valued resource — the

dedicated and talented workforce. FMS will

provide a work environment that values training,

where employees can maintain the knowledge,

skills and abilities needed to accomplish today’s

program and performance goals and develop those

needed to meet the challenges of tomorrow. To
Strategic Plan • Fiscal Years 2003-2008 B11

achieve its strategic goals, FMS is pursuing other

strategies that:

• Provide incentives and reduce barriers for

agencies and customers to increase use of

electronic payments and collections;

• Use sound management practices to oversee IT

investments and ensure they operate in a

secure environment;

• Maximize Internet business activity;

• Provide agencies with easy and secure access to

FMS systems and information;

• Increase agencies’ knowledge of financial

management and accounting;

• Minimize redundant operations and systems;

• Work collaboratively with federal, state and

local agencies to identify issues and opportunities to improve financial management;

• Support and fund pilots and prototypes to

quickly assess emerging technologies and

approaches and to evaluate the business case;

• Provide incentives and reduce barriers for

stakeholders to take action in support of

improved accounting, cash management and

debt collection;

• Take a leadership role to identify and resolve

issues even though responsibility may be

shared with other agencies;

• Serve as a model for other federal agencies by

providing good financial management and

maintaining effective internal controls;

• Foster a learning organization with a supportive work environment where all employees can

maintain the knowledge, skills, and tools to

succeed and are valued and respected for their

shared contributions;

• Recruit and develop talented employees from

diverse backgrounds to provide all employees

with challenging work, honest feedback, and

opportunities for growth; and,

• Provide timely, useful, and accurate cost

accounting data and performance information

to aid in decision making.

Major Programs

• Payments

• Collections

• Debt Collection

• Government-wide accounting

and reporting
B12 Department of the Treasury

Internal Revenue Service (IRS)

Mission

IRS’s mission is to provide America’s taxpayers top

quality service by helping them understand and

meet their tax responsibilities and by applying the

tax law with integrity and fairness to all.

Overview/Background

The IRS deals directly with more Americans than

any other institution, public or private. It also is

one of the world’s most efficient tax agencies. In

2002, the IRS collected more than $2 trillion in

revenue and processed nearly 227 million tax

returns. It cost taxpayers 45 cents for each $100

collected by the IRS. In 2002, the agency also

assisted nearly 95 million taxpayers who called the

toll-free automated telephone line, wrote letters or

visited one of the more than 400 offices Taxpayer

Assistance Centers (TACs) the IRS maintains

nationwide.

Bureau Strategic/General Goals

(Bolded goals are included in the Corporate Treasury

Strategic Plan)

• Top-quality service to each taxpayer in

every interaction

• Top-quality service to all taxpayers through

fair and uniform application of the law

• Productivity through a quality work

environment

Bureau Means and Strategies

IRS will use major strategies to achieve progress on

their strategic goals. The IRS has developed these

strategies based on senior management’s consideration of internal research and analysis, external

stakeholder input; independent inspector general

audit and oversight; and and General Accounting

Office (GAO) recommendations, and employee

input on the key trends, issues, and problems that

most affect the IRS. The major strategies provide

practical guidance as to how IRS should allocate

and focus management to achieve the strategic

goals.

The current IRS Strategic Plan covers the period

for FY 2000-2005. IRS is updating its Strategic

Plan to better align IRS goals with Department of

Treasury’s goals and will have a draft plan by

September 30, 2003. This plan will link IRS’

increased enforcement of the tax laws with its

current high level of customer service. In addition,

IRS is in the process of developing more outcome

and efficiency related measures to better assess the

achievement of its goals.

The major strategies in the IRS Strategic Plan,

FY 2000-2005 are to:

• Address key areas of noncompliance;

• Meet the needs of taxpayers;

• Reduce taxpayer burden;

• Broaden the use of electronic interactions;

• Stabilize traditional compliance activities;

• Deal effectively with the global economy;

• Meet the special needs of the tax-exempt

community;

• Recruit, develop, and retain a quality

workforce;

• Provide high-quality, efficient, and responsive

information services and shared support

services; and

• Promote effective asset and information

stewardship.
Strategic Plan • Fiscal Years 2003-2008 B13

Major Programs

The IRS Restructuring and Reform Act of 1998

resulted in the IRS reorganizing itself into four

major operating divisions, aligned by types of

taxpayers:

• Wage and Investment: This division serves

approximately 116 million taxpayers who file

individual and joint tax returns.

• Small Business and Self-Employed: This

division serves the approximately 45 million

small businesses and self-employed taxpayers.

• Large and Mid-sized Businesses: This division

serves corporations with assets of more than

$10 million.

• Tax Exempt and Government Entities: The

division serves employee benefit plans and

taxexempt organizations such as nonprofit

charities and governmental entities.

Other divisions include Appeals, Chief Counsel,

Communications and Liaison, and Criminal

Investigation, and the Taxpayer Advocate Service.
B14 Department of the Treasury

The United States Mint (MINT)

Mission

The primary mission of the Mint is to produce an

adequate volume of circulating coinage for the

nation to conduct its trade and commerce. In

addition, the Mint produces and markets numismatic coins and coin products and to safeguard the

nation’s silver and gold reserves.

Overview/Background

Since Congress created the United States Mint in

1792, it has grown to a world-class metal manufacturing and marketing enterprise with operations in

five states and the District of Columbia. The

agency produced 14.4 billion coins in 2002,

fulfilling the Mint’s mission to produce the nation’s

circulating coinage for trade and commerce. Today,

the Mint also ranks among the most technologically advanced enterprises in the country and is the

world’s 30th largest online retailer.

Bureau Strategic/General Goals

(Bolded goals are included in teh Corporate Treasury

Stragegic Plan.)

• Be a model government agency that matches

world class business practices.

• Value and communicate with the American

People.

• Design, sell and deliver quality products.

• Respect and value our co-workers.

Bureau Means and Strategies

The Mint has adopted several strategies to be a

model government agency: streamline processes;

maximize investment return through competitive

sourcing, financial planning, and integrating

budget and performance; and maximize technology and systems functionality to achieve strategic

goals and objectives in a cost effective and efficient

manner. To ensure the security of the Mint, we are

pursuing innovative threat assessment strategies

and collaborating with other law enforcement

agencies.

The Bureau is developing a Mint-wide educational

outreach program to better communicate with the

American people. To achieve our third goal of

designing, selling, and delivering quality products,

we are going to: expand our customer base by

providing quality products and services that

respond to our customers’ needs; design cost

effective marketing programs; benchmark against

best-in-business standards for customer service;

adopt state-of-the-art manufacturing techniques;

and create beautiful designs that depict the diversity of America.

Finally, we will continue to respect and value our

coworkers through the following strategies: require

personal accountability at all levels for workforce

and workplace safety; strengthen our internal

communications and ensure project collaboration

across the organization; effectively use the intranet;

expand Mint career, training, recruitment, and

retention opportunities; and make the Mint a

learning organization.

Major Programs

Circulating Coinage: Produce coins to satisfy the

needs of commerce in a cost efficient and safe

manner with state of the art manufacturing

technology and equipment.

Numismatics: Foster the health of numismatics by

producing outstanding products and service,

expanding markets, and supporting the long-term

value of our products, while making a reasonable

return for the American taxpayer.

Protection: Maintain a highly professional police

force with the tools and resources to respond to

changing threats in our environment.
Strategic Plan • Fiscal Years 2003-2008 B15

The Office of the Comptroller of the Currency (OCC)

Mission

Congress created the OCC to charter national

banks, oversee a nationwide system of banking

institutions, and assure that national banks are safe

and sound, competitive, and profitable, and

capable of serving in the best possible manner the

banking needs of their customers.

Overview/Background

The OCC licenses, regulates, and supervises the

Nation’s system of federally-chartered banks.

Approximately 2150 national banks and 53 federal

branches or agencies of foreign banks operate

througout the U.S. Although national banks

account for only 27 percent of the number of

commercial banks nationwide, they hold 56

percent of the total commercial banking assets in

the U.S.

Bureau Strategic/General Goals

(Bolded goals are incorporated in the Corporate

Treasury Strategic Plan.)

• A safe and sound national banking system.

• Fair access to financial services and fair

treatment of bank customers.

• A flexible legal and regulatory framework

that enables the national banking system to

provide a full competitive array of financial

services.

• An expert, highly motivated, and diverse

workforce that makes effective use of OCC

resources.

Bureau Means and Strategies

Some of OCC’s key means and strategies are to:

• Assess the effectiveness of problem bank

supervision and develop and apply, as needed,

new strategies for addressing and resolving

supervisory issues and problem banks;

• Achieve effective compliance with the examination schedule requirements of the Federal

Deposit Improvement Act;

• Refine the OCC’s analytical processes and

tools and expand their use in bank supervision

activities;

• Conduct examinations to determine compliance with the USA Patriot Act;

• Enforce anti-money laundering and antiterrorism statutory and regulatory requirements;

• Work to further leverage the use of technology

in bank supervision activities and to expand

accessibility and capabilities of the OCC’s

National BankNet;

• Identify new products and services, and

emerging risk areas, including those related to

operational and technology-related vulnerabilities, and adjust supervisory strategies and

activities as appropriate;

• Support the ability of national banks to be

involved in community and economic development activities;

• Take a lead role in addressing predatory

lending practices;

• Foster fair treatment of customers of national

banks through OCC guidance and supervisory

enforcement actions where appropriate;

• Provide an avenue for customers of national

banks to resolve complaints;

• Expand the availability of the “e-Corp”

automated application for banks to file

licensing applications electronically;
B16 Department of the Treasury

• Participate in the interagency Economic

Growth and Regulatory Paperwork Reduction

Act project to review regulations for unnecessary burden; and

• Support continued recognition of the preemptive attributes of the national bank charter

through appropriate opinions, regulations, and

participation in litigation where warranted.

Major Programs

The OCC organizes its activities around three

major programs: Supervise, Charter, and

Regulate.

The Supervise program consists of those ongoing

supervision and enforcement activities undertaken

to ensure that each national bank is operating in a

safe and sound manner and is complying with

applicable laws, rules, and regulations for the bank

and the customers and communities it serves. This

program includes bank examinations and enforcement activities; resolution of disputes through the

National Bank Appeals process; ongoing monitoring of banks; and analysis of systemic risk and

market trends in the national banking system or

groups of national banks, the financial services

industry, and the economic and regulatory environment. Bank Secrecy Act/anti-money laundering, the scrutiny of accounting practices, integrity

of management information systems, business

continuity plans, and off-balance sheet activities

will be prominent issues we will address in the

supervision of national banks.

The Charter program involves those ongoing

activities that result in the chartering or liquidation

of national banks as well as the evaluation of the

permissibility of structures and activities of

national banks and their subsidiaries. This includes

the review and approval of new national bank

charters, mergers, acquisitions, conversions,

business combinations, corporate reorganizations,

changes in control, operating subsidiaries,

branches, relocations, and subordinated debt

issues.

The Regulate program consists of those ongoing

activities that result in the establishment of

regulations, policies, operating guidance, and

interpretations of general applicability to national

banks. These regulations, policies, and interpretations may establish system-wide standards, define

acceptable banking practices, provide guidance on

risks and responsibilities facing national banks, or

prohibit (or restrict) banking practices deemed to

be imprudent or unsafe. This program also includes the establishment of examination policies,

handbooks, and interpretations for examiners.
Strategic Plan • Fiscal Years 2003-2008 B17

Office of Thrift Supervision (OTS)

Mission

OTS’s mission is to supervise savings associations

and their holding companies in order to maintain

their safety and soundness and compliance with

consumer laws and to encourage a competitive

industry that meets America’s financial services

needs.

Overview/Background

OTS dedicates over 85 percent of its resources and

revenues to examine and supervise savings associations and their holding companies to ensure that

they remain safe, protect consumers, and promote

competitiveness. The financial condition of the

thrift industry is strong. As of March 2003, 958

thrifts were in existence with more than $1 trillion

of assets. Over 99 percent of the industry was well

capitalized, and no thrift was less than adequately

capitalized. A strong economy, a generally hospitable interest rate environment, sound lending and

investment practices, and effective regulation,

including strengthened capital standards, aided

this strong performance. Thrifts reported record

earnings and capital for 2002.

Bureau Strategic/General Goals

(Bolded goals are incorporated in the Corporate

Treasury Strategic Plan)

• A safe and sound thrift industry.

• A flexible legal and regulatory framework

that enables the thrift industry to provide a

full competitive array of financial services.

• Fair access to financial services and fair

treatment of thrift customers.

• A professional and motivated workforce that

provides exceptional service to its customers and

supports achievement of OTS business goals.

Bureau Means and Strategies

Through examinations, OTS assesses the financial

condition and risk profile of thrift institutions and

identifies violations of law and regulation and

potential financial and economic problems. To

combat fraud, money laundering, and financial

crimes, OTS reviews thrifts during exams for

compliance with the requirements of the Bank

Secrecy Act, the USA Patriot Act, and other antimoney laundering laws. Examinations help to

prevent development or continuation of unsafe

operating practices and to resolve problems or

weaknesses timely, including those related to

consumer protection and the Community Reinvestment Act (CRA). To improve the stability of

the international financial system, OTS participates in matters before the Basel Committee for

Banking Supervision.

Major Programs

OTS’s single program is to supervise the thrift

industry.
B18 Department of the Treasury
Strategic Plan • Fiscal Years 2003-2008 C1

C. Table of Cross-Cutting Issues, and Linkages

to Partners

Treasury depends on other federal agencies and private partners for information, data, guidance and

support to accomplish its mission and achieve desired results.

Economic Financial Management

Promote Promote Preserve Manage the Ensure Professionalism,

prosperous Stable U.S. the Integ- Government’s Excellence, Integrity,

U.S. and and World rity of Finances and Accountability

World Economies Financial Effectively in the Management

Economies Systems and Conduct of the

Department of Treasury

Central Intelligence Agency X

Civilian Agency Acquisition

Council

Commodity Futures Trading

Commission X

Department of Agriculture X

Department of Commerce X X

Department of Defense X X

Department of Interior X

Department of Justice X X

Department of Labor X X X

Department of State X X X X

Department of Transportation X

Department of Health &

Human Services X X

Department of Homeland

Security X

Department of Housing &

Urban Development X X

Elect. Processes Initiative

Comm.

Environmental Protection

Agency X

Export-Import Bank X

Federal Chief Information

Officers Council X

Federal Credit Policy

Working Group X X
C2 Department of the Treasury

Economic Financial Management

Promote Promote Preserve Manage the Ensure Professionalism,

prosperous Stable U.S. the Integ- Government’s Excellence, Integrity,

U.S. and and World rity of Finances and Accountability

World Economies Financial Effectively in the Management

Economies Systems and Conduct of the

Department of Treasury

Federal Deposit Insurance

Corp. X

Federal Housing Finance

Board X

Federal Reserve X X X X

General Services

Administration X X

Govt. Chief Fin. Officers

Council X

Joint Financial Management

Improvement Program X X

National Security Council X

Office of National Drug

Control Policy X

Office of Personnel

Management X

Overseas Private Investment

Corp. X

Pension Benefit Guaranty

Corp. X

President’s Working Groups X

Procurement Executive

Committee X

Securities & Exchange

Commission X X X

Securities Technical Institute X

Small Business Administration X X

U.S. Trade Representative X
Strategic Plan • Fiscal Years 2003-2008 D1

D. Program Evaluations

Major programs continuously assess progress through systematic program reviews and evaluations. A list

of program evaluations is provided below. The list is not intended to capture each and every program

evaluation. However, the major program evaluations conducted in the Bureaus are represented below.

Program/Initiative Evaluation

BEP Manufacturing Internal reviews, ISO Quality Audits

Protection and Accountability of Assets Internal reviews, U.S. Secret Service

Reviews Independent Auditor

(Ernst & Young)

Resource Management Independent Auditor (Ernst & Young)

BPD Wholesale Securities Services Internal reviews, Internal BPD and FRB

evaluations and periodic inspector

general audits

Government Agency Investment Services Internal reviews, periodic an inspector

general audits and an annual inspector

general/IPA financial statement audit

Retail Securities Services Internal reviews, Internal evaluations

and periodic inspector general audits

Summary Debt Accounting Internal reviews, and an annual GAO/

IPA audit of financial statements and

electronic data processing systems

Franchising Internal reviews, periodic inspector

general and OPM audits and annual

inspector general and IPA audits and

reviews

CDFI CDFI Fund Program An inspector general or an independent

contractor will evaluate the effectiveness of

the CDFI Program

New Markets Tax Credits Multi-year evaluation of program

effectiveness by GAO

Bank Enterprise Awards (BEA) An inspector general or independent

contractor evaluates the effectiveness of the

BEA Program.

FinCEN Regulatory Framework - Options to reduce FinCEN will chair a public-private working

low value currency transaction reports group to identify workable mechanisms, in

partnership with the regulated industry, to

achieve the desired 30 percent reduction in

CTR filings.
D2 Department of the Treasury

FinCEN Analytical Services and Products - Investigative A work process review will be completed in

Case Support Work Processes FY 2004 in the anticipation of the

development of an electronic management

system. FinCEN is currently following up

on that effort with a detailed requirements

analysis that will be the basis for

modernized case and product tracking system.

Customer Satisfaction Conduct customer satisfaction surveys on

investigative case reports and regulatory

support annually.

Employee Satisfaction Follow-up on baseline employee satisfaction

survey conducted in 2001. Conduct a

follow up survey in 2003.

Internal Control Reviews of credit cards Conduct a follow-up review on the controls

and other vulnerable areas over credit cards, acquisition processes, and

other identified areas.

Program Reviews Review at least one program annually to

identify areas that may need improvement

to improve the efficiency and effectiveness

of the delivery of its programs. Generally,

these will be team efforts including

members of the program.

FMS Computer Security/All Programs Entity-wide security program to address

weaknesses in computer security planning

and management as identified by GAO.

Self-Assessments & Certification/ NIST Self-Assessments and

Accreditation/All Programs Certification/Accreditation Reviews of

C&A documents by FMS IT Security

Oversight & Compliance Staff and C&A

facilitators. Review of the FMS IT Security

Program by the Treasury Enterprise IT

Security Planning and Assurance Staff.

Effective Cash Controls Audit of Financial Management Service’s

Fiscal Years 2002 and 2001.

Schedules of Non-Entity Government-wide

Cash

Improved Financial Information/ Management Letter for Fiscal Year 2002

Government-wide Reporting and Accounting Audit of Schedule of Non-Entity Assets,

Non-Entity Cost and Custodial Revenue
Strategic Plan • Fiscal Years 2003-2008 D3

FMS Program Review/All Programs Determined optimum organizational

structure for development of web-based

systems under the government wide

commerce initiative.

IT Internal Controls/All Programs - IT specialist, security specialists and

Physical and Environmental IT Reviews program office representatives conduct

reviews to determine the adequacy of

internal controls related to IT and physical

securities at the various FMS sites and

servicing banks that act as our financial agents.

Checks Outstanding Reconciliation Independent assessment by a public

Procedures Assessment accounting firm to determine whether

system reconciliation procedures were

adequate and controls were in place to

correctly identify the amount of

outstanding checks. Maintenance of an

independent audit trail.

Program Analysis/Debt Collection Use of Program Assessment Rating Tool

then all remaining programs (PART)

IRS Tax Law Complexity Annual Report of the National Taxpayer

Advocate to Congress listing the

top problems taxpayers face in complying

with their tax obligations as well as a list of

suggested legislative changes to correct

issues driven by specific tax code sections.

Taxpayer Burden IRS National Research Program

measures voluntary compliance and

identifies ways of reducing the burden of

compliant taxpayers. The National Taxpayer

Advocate’s Annual Report to Congress lists

the most significant problems taxpayers face

in meeting their obligations and makes

suggestions for IRS to implement

improvements.

Customer Satisfaction As required by RRA 98, IRS monitors the

satisfaction of taxpayers.

Tax Law Compliance The IRS National Research Program

measures voluntary compliance: Filing

Compliance – percent of returns timely

filed, Payment Compliance – percent of tax

timely paid, and Reporting Compliance –

accuracy of timely filed tax returns.

(Ongoing)

Employee Satisfaction Annual through a Servicewide survey of all

employees (includes the Gallup

Q12 and internally developed questions).
D4 Department of the Treasury

Mint Benchmarking manufacturing performance New initiative being spearheaded by the

Director of the United States Mint within

the International Mint Director community

to begin a forum for discussion of issues at

their annual conference. Informal

benchmarking on several different

production-related issues with private sector.

Customer Service Independent survey to assess customer

satisfaction with Mint numismatic products

and services.

World class administration and cost containment Mint’s Office of Management Services

will independently review Mint programs,

major initiatives, and finance functions,

including review of standard operating

procedures, policies and internal manage

ment controls.

Program performance Partnering with universities or contractors

to evaluate Mint programs is planned for

FY 2003 - FY 2008.

OCC Supervise Program The Office of the Ombudsman: The

Ombudsman, through its administration of

the National Bank appeals process, the

customer assistance program, and ongoing

examination questionnaires, provides

feedback on the quality of OCC

supervision. Program evaluation activities

are continuous.

Quality Assurance Program: The OCC’s

quality assurance (QA) program is designed

to ensure that the objectives for bank

supervision are achieved.

The Office of the Ombudsman: The

Supervise Program Management Unit of

Management Accountability Division

coordinates the programs.

An inspector general conducts reviews of

various aspects of OCC operations every

year and also conducts material loss reviews

due to bank failures. The schedule of

reviews is issued each year.

General Accounting Office (GAO) conducts

targeted reviews of OCC regulation and

supervision of national banks. The schedule

of reviews is issued each year.
Strategic Plan • Fiscal Years 2003-2008 D5

OCC Supervise Program The OCC was included in the first twenty

percent of federal programs reviewed during

Fiscal Year 2002 by OMB and was evaluated

as “on program”.

Charter Program Licensing Customer Satisfaction Feedback

Program: Customer feedback on the

licensing process is analyzed for enhancing

program delivery on a continuous basis.

Inspector general and GAO as previously

described.

Regulate Program Inspector general and GAO as previously

described.

Resource Management Program Analysis Unit: The Program

Analysis Unit (PAU) is responsible for

analyzing the major components of the

OCC’s organization and programs to

recommend ways to ensure more efficient

use of OCC resources. Annually, the

Comptroller and PAU determine the

specific reviews to be conducted.

Management Accountability Program: The

Management Accountability Program

(MAP) is an ongoing initiative with the

primary objective of ensuring a sound

system of internal controls at all levels of the

organization. Key MAP elements include

Program Analysis Unit: The Program

an annual risk assessment, a control-testing

program, and an executive management

certification program.

Inspector General and GAO as previously

described.

Independent Public Accountant: Every

year, the OCC commissions the services of

an accounting firm to conduct a financial

statement opinion audit and to provide an

assessment of the OCC’s program of

financial controls.

OTS Mandatory Audit Firm Rotation Section 207 of the Sarbanes-Oxley Act of

2002 (Public Law 107-204): U.S. General

Accounting Office will conduct a study on

the potential effects of mandatory rotation

of registered public accounting firms.
D6 Department of the Treasury

OTS Bank Secrecy Act Examinations An inspector general is evaluating the

effectiveness of OTS’s Bank

Secrecy Act examinations, including its

efforts to detect money-laundering activities.

Financial Statement An independent certified public accounting

firm performs an annual financial statement

audit.

TTB TTB is a new bureau, created earlier this

year when Treasury’s Bureau of Alcohol,

Tobacco and Firearms was divided into two

agencies. TTB has not yet established a

formal internal program review process.

Once it does so, all of these programs will

be reviewed and evaluated periodically.

TTB plans to contract out for a complete

process review and reengineering of the

major programs, in particular the

Application Program and the Revenue

Collection Program processes at our

National Revenue Center.

An inspector general plans to evaluate

specific activities in TTB’s Revenue

Collection Program.
Strategic Plan • Fiscal Years 2003-2008 E1

E. Glossary of Terms and Acronyms

ACH – Automated Clearing House

ASAP – Automated Standard Application for Payments

ATF - Alcohol, Tobacco and Firearms: A Bureau within Treasury before the Creation of the Department of Homeland Security. Some of its functions were divested to the Department of Justice; the

functions that remained within Treasury comprise the Alcohol and Tobacco Tax and Trade Bureau

(TTB).

ATTF – Anti-Terrorism Task Force: part of the U.S. Attorney’s Office

BSA – Bank Secrecy Act: authorizes the Treasury Department to require financial institutions to

maintain records of personal financial transactions that “have a high degree of usefulness in criminal, tax

and regulatory investigations and proceedings.” It also authorizes the Treasury Department to require any

financial institution to report any “suspicious transaction relevant to a possible violation of law or

regulation.”

BIT – Bilateral Investment Treaty: universally accepted instrument for the promotion and legal

protection of foreign investments.

BEP - Bureau of Engraving and Printing: designs and manufactures U.S. currency, many stamps,

securities, and other official certificates and awards.

BPD - Bureau of the Public Debt: borrows the money needed to operate the Federal Government and

accounts for the Public Debt. It administers the public debt by issuing and servicing U.S. Treasury

marketable savings and special securities.

CAMELS: Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, Sensitivity to Market

risk used to evaluate bank programs.

CDE -Community development entities: organizations that serve and maintain accountability to lowincome communities and their residents. They are often administered locally, and have the goal of

improving the economic prosperity and standard of living in their community.

CDFI -Community Development Financial Institutions Fund: expands the availability of credit,

investment capital, and financial services in distressed urban and rural communities.

CIRB – Capital Investment Review Board

COLA – Certificate of Label Approval: issued by TTB in accordance with the Federal Alcohol Administration Act which requires importers and bottlers of beverage alcohol to obtain certificates of label

approval or certificates of exemption from label approval for most alcoholic beverages prior to their

introduction into interstate commerce.

DO - Departmental Offices: The offices within Treasury primarily responsible for the formulation of

policy (as distinct from the Bureaus, that are primarily operational).

DHS – Department of Homeland Security

DOJ – Department of Justice

EFT – Electronic Funds Transfer
E2 Department of the Treasury

EFTPS - Electronic Federal Tax Payment System: a free service offered by the U.S. Department of the

Treasury to help business and individual taxpayers conveniently pay all their federal taxes electronically.

EOTFFC – Executive Office of Terrorist Financing and Financial Crimes: part of Treasury’s Departmental Offices leading the effort to stop the flow of money to terrorists and terrorists’ organizations.

ETA – Electronic Transfer Accounts

EVMS – Earned Value Management System

FATF – Financial Action Task Force: an inter-governmental body whose purpose is the development

and promotion of policies, both at national and international levels, to combat money laundering. The

Task Force is a “policy-making body” that works to generate the necessary political will to bring about

national legislative and regulatory reforms to combat money laundering.

FBI – Federal Bureau of Investigation

FBICC – Financial Banking and Infrastructure Information Committee: facilitates federal efforts to

improve the reliability and security of the U.S. financial system.

FDIC – Federal Deposit Insurance Corporation

FinCEN - Financial Crimes Enforcement Network): is responsible for collecting, analyzing and

sharing information needed to combat the financial aspects of criminal activity worldwide.

FMS - Financial Management Service: provides central payment services to Federal program agencies,

operates the Federal Government’s collections and deposit systems, provides government-wide accounting and reporting services, and manages the collection of delinquent debt.

FPA – Federal Program Agencies

FTO - Foreign terrorist organizations: A designation of the U.S. Government that identifies a foreign

entity as a terrorist organization.

FTAA - Free Trade Area of the Americas: A proposed free trade area incorporating all the nations in the

Americas.

GAO – Government Accounting Office

GDP – Gross Domestic Product

HIFCA – High Risk Money Laundering and Related Financial Crime Areas

IRS - Internal Revenue Service: Treasury’s bureaus responsible for determining, assessing, and collecting internal revenue in the United States.

IRS-CI - Internal Revenue Service: investigates 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.

IEEPA - International Emergency Economic Powers Act: a part of Presidential authority upon which

OFAC relies to administer economic sanctions and embargo programs directed primarily against specific

foreign countries and individuals posing a threat to the national security, foreign policy, and economy of

the United States.
Strategic Plan • Fiscal Years 2003-2008 E3

IFI - International financial institutions: Institutions owned and funded by governments, charged

with a variety of tasks related to the international financial and economic system, including promoting

growth and maintaining stability. Examples include the International Monetary Fund, and the World

Bank.

IMF - International Monetary Fund: an international organization of 184 member countries. It

promotes international monetary cooperation, exchange stability, and orderly exchange arrangements;

fosters economic growth and high levels of employment; and provides temporary financial assistance to

countries to help ease balance of payments adjustment.

JFMIP – Joint Financial Management Improvement Program: a cooperative undertaking of the U.S.

Department of Treasury, GAO, OMB and OPM working in cooperation with each other and other

agencies to improve financial management practices in government.

JTTF – Joint Terrorism Task Force: part of the FBI

MCA - Millennium Challenge Account: U.S. Government developed initiative focuses on channeling

funds to countries that follow pro- growth policies and on structuring our bilateral contributions to

create incentives for specific measurable results. MCA operates on the principle that aid is more likely to

promote economic growth and raise living standards in counties that are pursuing the sound political,

economic and social reforms necessary for development to occur.

MCC – Millennium Challenge Corporation: a small government corporation, administering the

MCA and designed to support innovative strategies and to ensure accountability for measurable results.

MDB - Multilateral development banks: lending institutions with many member governments.

Members are either donors that provide investment capital or poorer, developing countries that borrow

from MDB’s. MDB’s are charged with increasing growth and raising living standards in the developing

and emerging markets.

Mint - U.S. Mint: designs and manufactures domestic, numismatic and bullion coins as well as commemorative medals and other numismatic items. The Mint distributes U.S. coins to the Federal Reserve

banks and maintains physical custody and protection of our nation’s silver and gold assets.

NMLS – National Money Laundering Strategy

NCUA – National Credit Union Administration

NSC – National Security Council

OCC - Office of the Comptroller of the Currency: charters, regulates, and supervises national banks to

ensure a safe, sound, and competitive banking system that supports the citizens, communities, and

economy of the United States.

OFAC - Office of Foreign Assets Control: administers economic sanctions and embargo programs

against specific foreign countries or groups to further U.S. foreign policy and national security objectives.

OMB – Office of Management and Budget

OTS - Office of Thrift Supervision: the primary regulator of all federal and many state-chartered thrift

institutions, which include savings banks and savings and loan associations.
E4 Department of the Treasury

PART - Program Assessment Rating Tool: a systematic, consistent process for developing program

performance ratings and then using that information to make budget decisions. Developed by OMB, the

PART is composed of assessment criteria on program performance and management. The PART establishes a high, “good government” standard of performance and will be used to rate programs in an open,

public fashion.

PCC – Policy Coordinating Committee: part of the National Security Committee

PMA - President’s Management Agenda: a strategy for improving the management of the Federal

government. It focuses on five areas of management weakness across the government where improvements and the most progress can be made. Those areas are: Strategic Management of Human Capital,

Budget and Performance Integration, Competitive Sourcing, Expanded E-government, and Improved

Financial Management.

PRS – Performance Reporting System: an internal reporting system capturing data on a regular basis to

inform management of trends, progress, and concerns in major program areas. The PRS provides data

and information on which the Annual Performance and Accountability Report is based.

SDGT - Specially designated global terrorist: individual designated by by the President, the Secretary

of the Treasury, or the Secretary of State as being involved in terrorist activities.

SDN - Specially designated national: an individual group or entity identified by the President or the

Secretary of the Treasury that is acting for or on behalf of, countries targeted for U.S. financial and

economic sanctions. SDNs are also individuals, groups, and entities, such as terrorists and narcotics

traffickers designated under programs that are not country-specific. Their assets are blocked and U.S.

persons are generally prohibited from dealing with them.

SDNTK - Specially designated narcotics kingpin/SDNT- Specially designated narcotics trafficker:

individual designated by the Secretary of the Treasury as being significantly involved in narcotics

trafficking.

TELP – Treasury Executive Leadership Program Competency based program focuses on leadership,

building relationaships across the Department, stengthening communications, and creating new perspectives on mission and customers.

TIRB – Treasury Investment Review Board

TRIP – Terrorism Risk Insurance Program: a temporary Federal program that provides for a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism.

TTB - Alcohol and Tobacco Tax and Trade Bureau: is responsible for enforcing and administering laws

covering the production, use, and distribution of alcohol and tobacco products. TTB also collects excise

taxes for firearms and ammunition.

TWEA - Trading With the Enemy Act: a part of Presidential authority upon which OFAC relies to

administer economic sanctions and embargo programs against specific foreign countries.

USSS – United States Secret Service: a bureau in the Department of Homeland Security; formerly part

of the Department of the Treasury.

WTO - World Trade Organization: the only global international organization dealing with the rules of

trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the

world’s trading nations and ratified by their parliaments.