part 2: 

annual 

performance 

report 

performance and accountability report | fiscal year 2010 

53 

introduction
 

the annual Performance report (aPr) provides information 

that enables the public to assess the Department’s performance 

relative to its mission and stewardship of the resources entrusted 

to it. the report is organized by strategic goal, objective, and 

outcome, and provides detail on how each of the metrics 

contributes to the Department’s overall mission. a performance 

statement is provided for each objective, along with charts and 

tables for cost and budget. baseline measures are included in the 

calculations and count as having “met” their targets. as in prior 

years, treasury has developed new measures and discontinued 

measures based on analysis of performance management needs. 

the table of key performance measures in each goal section 

includes data from the last two years; a performance rating 

for 2010; the percent of target achieved; the percent change 

in actual results from the last fiscal year; the fiscal year 2011 

target; and trends in both performance and targets over the 

last four years. trends are indicated by colored arrows, with red 

indicating an unfavorable direction, green a favorable direction, 

black indicating no change, and “b” for a baseline measure. 

the Department considers external factors when evaluating 

performance. In some cases, additional indicators are discussed 

to provide an enhanced description of progress. 

each section of the aPr concludes with a “Moving forward” 

piece that describes future actions to be taken. actions could 

include closing performance gaps, developing new measures, or 

drafting new polices and regulations. 

throughout the report, cost is stated as “Performance cost,” 

and represents imputed costs, depreciation, losses, and other 

expenses not requiring budgetary resources. Performance 

cost was used rather than net cost because it more accurately 

represents the total cost to achieve a result or outcome. for 

instance, while the net cost to manufacture coins and currency 

for non-appropriated bureaus such as the u.s. Mint and the 

bureau of engraving and Printing is zero because it is essentially 

self-funded, the real cost of operating these organizations is over 

$4 billion once all imputed costs, depreciation, losses, and other 

expenses are included. While performance cost is more than 

net cost, it is less than the gross cost reported on the statement 

of net cost because it excludes accounts that do contribute to 

the cost of achieving performance for the agency, such as the 

exchange stabilization fund and the federal financing bank. 

fiscal year 2010 is the fourth year that treasury has included 

this information. 

overall, the Department set more aggressive targets on 37 

percent of its measures in 2010 compared to 2009, and achieved 

72 percent of those targets compared to 80 percent in 2009. 

the treasury Department continues to review its performance 

measure set and eliminate or modify measures to obtain the 

best information possible on performance. treasury’s annual 

Performance report has not been audited. 

see http://www.treasury.gov/offices/management/dcfo/ 

accountability-reports for the full report of the treasury 

Department’s fiscal year 2010 Performance Measures. 

introduction 

part 2: annual performance report
the department of the treasury 

54 

coMPleteness anD relIabIlIty 

of PerforMance Data 

aCCuraCy Of perfOrmanCe 

m * easures 

Measures are classified for accuracy as follows: 

•	 Reasonable Accuracy: Judged to be sufficiently accurate for 

program management and performance reporting purposes 

(specified in office of Management & budget circular 

a-11, section 230-4(f)) 

•	 Questionable or Unknown Accuracy: Judged to be materially 

inadequate (specified in office of Management & budget 

circular a-11, section 230-4(f) as “materially inadequate”) 

prOCeDures fOr COnDuCting 

revieW Of the Department’s 

perfOrmanCe measure Data 

the Department of the treasury’s office of strategic Planning 

and Performance Management prepares the annual report on 

performance measures and monitors component-submitted 

performance information. based on a finding in fiscal year 2006, 

it was determined that improvements to the internal control 

process for performance measures were needed. Improvements 

to the process included: 

•	 all measures are now prioritized as high, medium, or low, 

based on the relationship to achieving the Department’s 

goals 

•	 a representative sample of measures are selected for review 

every fiscal quarter 

•	 supporting documentation from that sample is reviewed for 

accuracy, reliability, and completeness 

•	 all measure calculations are verified, data sources are 

validated, and comparisons are made to prior year results 

•	 Information related to the measures is maintained in hardcopy form and can be reviewed at any time 

as a result, performing this process will uncover any potential 

data or calculation error and will provide additional assurances 

on the integrity of the information and data presented in the 

annual Performance and accountability report. 

COmpleteness Of Data 

Not Available: there were no measures in fiscal year 2010 for 

which data was not available. 

Discontinued: the following performance measures were 

discontinued in fiscal year 2010 and will not have data 

available for this report. explanations for why these 

measures were discontinued can be found at http://www. 

treasury.gov/offices/management/dcfo/accountability-reports. 

Bureau Performance Measure 

BEP Currency Production 

BEP Improper and/or erroneous payments or purchases 

BEP Maintain ISO certification 

BEP Other financial losses 

BEP Security costs per 1000 notes delivered 

BEP Total financial losses 

BEP Total regulatory fines and claims paid 

CDFI Administrative cost per number of Bank Enterprise Award (BEA) 

applications processed 

CDFI Administrative costs per financial assistance (FA) application 

processed 

CDFI Administrative costs per number of Native American CDFI 

Assistance (NACA) applications processed 

CDFI Administrative costs per number of New Markets Tax Credit 

(NMTC) applications processed 

DO Number of material weaknesses closed (significant management 

problems identified by GAO, the IGs and/or other bureaus) 

MINT Absolute Value of Production Percent Deviation from net Pay 

MINT Employee Confidence in Protection 

MINT Numismatic Net Margin 

MINT Protection Cost Per Square Foot 

Treasury 

Franchise Fund 

Operating expenses as a percentage of revenue – Consolidated/ 

Integrated Administrative Management 

Treasury 

Franchise Fund 

Operating expenses as a percentage of revenue – Financial 

Systems, Consulting and Training 

* Performance measures were not audited. 

completeness and reliability of performance data 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

55 

Baseline: the following measures established baseline values 

and targets in fiscal year 2010: 

Bureau Performance Measure 

BPD Percent of overall customer satisfaction with Government Agency 

Investment Services 

BPD Percent of Summary Debt Accounting business processes 

restructured or eliminated 

BPD Percent of Primary Dealers that submit live bids from their disaster 

recovery site on two separate auction dates 

CDFI Application Cycle Time - BEA 

CDFI Application Cycle Time - CDFI 

CDFI Application Cycle Time - NMTC 

CDFI Application Cycle Time - Native Initiatives 

CDFI Disbursement Cycle Time - BEA 

CDFI Disbursement Cycle Time - CDFI 

CDFI Disbursement Cycle Time - NMTC 

CDFI Disbursement Cycle Time - Native Initiatives 

Mint Circulating on-time delivery 

MINT Safety Incident Recordable Rate 

Data Reliability: Performance data presented in this report 

meets the standards for reliability set forth in office of 

Management & budget circular a-11, section 230-5(f). 

the circular states that performance data must be accurate 

and reliable and that verification and validation techniques 

should be in place. 

for additional details on performance measure information, see 

http://www.treasury.gov/offices/management/dcfo/accountabilityreports. 

completeness and reliability of performance data 

part 2: annual performance report
the department of the treasury 

56 

strategic goal: 

effectIVely ManageD 

u.s. goVernMent fInances 

strategic objective: 

available cash resources to operate the Government 

the treasury Department manages the nation’s finances by 

collecting money due to the united states, making its payments, managing its borrowing, investing when appropriate, and 

performing central accounting functions. sound fiscal management ensures the continual operation of essential government 

services and allows the Department to meet its financial obligations while minimizing borrowing costs. accurate projections of 

the u.s. government’s cash requirements ensure that funds are 

available to cover federal payments on an ongoing basis. the 

ability of the treasury to manage the nation’s finances is essential to maintaining the stability and integrity of the financial 

system. 

the bureaus and policy offices responsible for the achievement 

of this objective are the following: 

•	 alcohol and tobacco tax and trade bureau (ttb) 

•	 bureau of the Public Debt (bPD) 

•	 financial Management service (fMs) 

•	 Internal revenue service (Irs) 

•	 office of Domestic finance 

the outcomes associated with this objective are the following: 

•	 revenue collected when due through a fair and uniform 

application of the law at the lowest possible cost 

•	 timely and accurate payments at the lowest possible cost 

•	 government financing at the lowest possible cost over time 

•	 effective cash management 

•	 accurate, timely, useful, transparent and accessible 

financial information 

Performance measures associated with this objective had 46 

percent more aggressive targets compared to 2009. 

Budget Trend 

Available Cash 

Resources to 

Operate the 

Government 

$0

$15,000,000

$11,498,755$10,759,020$11,699,999$12,024,656$12,642,310$13,785,364$13,851,632 

2004 2005 2006 2007 2008 2009 2010 

Dollars (in Thousands) Dollars (in Thousands) $12,000,000

$9,000,000

$6,000,000

$3,000,000

Fiscal Year 

Performance 

Cost Trend 

Available Cash 

Resources to 

Operate the 

Government 

$20,000,000

$11,910,415$13,111,129$12,979,117$13,354,531$14,042,171$14,425,866$15,511,409 

2004 2005 2006 2007 2008 2009 2010 

$15,000,000

$10,000,000

$5,000,000

$0

Fiscal Year 

Performance Cost 

by Outcome 

Available Cash 

Resources to 

Operate the 

Government 

possible cost

transparent and accessible 

financial information 

2.3% Government 

management

2.2%Timely and financing at the lowest 

accurate payments possible cost over time at the lowest 

possible cost 

94.7% Revenue 

collected when 

due through a fair 

and uniform 

application of the 

law at the lowest 

strategic goal: effectively managed u.s. government finances 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

57 

revenue COlleCteD When Due thrOugh a fair anD unifOrm appliCatiOn 

Of the laW at the lOWest pOssible COst 

based on performance results, treasury was mostly successful in achieving this strategic outcome for fiscal year 2010 as demonstrated by the 

chart below. It is important to note that 2010 targets for this outcome were over 50 percent more aggressive than in 2009. 

Key Performance Measure Table 

the following table contains only key performance measures associated with this outcome. actual and target trends represent four 

years of data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/ 

management/dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011 

Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Amount of delinquent debt collected per $1 spent ($) FMS $53.76 $43.00 $54.54* 126.8% 1.5% Exceeded $43.00  

Amount of delinquent debt collected through all available tools 

($ billions) 

FMS $5.03 $4.65 $5.45 117.2% 8.4% Exceeded $4.84  

Percentage collected electronically of total dollar amount of 

Federal government receipts (%) 

FMS 84 80 85 106.3% 1.2% Exceeded 82  

Percentage of delinquent debt referred to FMS for collection 

compared to amount eligible for referral (%) 

FMS 100 97 100 103.1% 0.0% Exceeded 97  

Unit cost to process a Federal revenue collection transaction ($) FMS $1.57 $1.25 $1.67 66.4% 6.4% Unmet $1.70  

Customer Contacts Resolved per Staff Year IRS 12,918 9,398 10,744 114% -16.8% Exceeded 10,181  

Customer Service Representative (CSR) Level of Service (%) IRS 70 71 74 104.2% 5.7% Exceeded 75  

Examination Quality (LMSB) - Industry (%) IRS 88 89 87 97.8% -1.1% Unmet 89  

Field Collection National Quality Review Score IRS 80.5 81 80.6 99.5% 0.1% Unmet 82  

Field Examination National Quality Review Score (%) IRS 85.1 86.3 84.9 98.4% -0.2% Unmet 86.3  

Percent of Business Returns Processed Electronically (%) IRS 22.8 24.3 25.5 104.9% 11.8% Exceeded 25.4  

Percent of Individual Returns Processed Electronically (%) IRS 65.9 70.2 69.3 98.7% 5.2% Unmet 74.7  

Refund Timeliness - Individual (paper) (%) IRS 99.2 98.4 96.1 97.7% -3.1% Unmet 98.4  

Taxpayer Self Assistance Rate IRS 69.3 61.3 64.4 105.1% -7.1% Exceeded 62.7  

Amount of revenue collected per program dollar ($) (New data 

compilation methodology, 2008) 

TTB $427 $400 $478 119.5% 11.9% Exceeded $410  

Percent of voluntary compliance from large taxpayers in filing 

tax payments timely and accurately (in terms of revenue) 

TTB 94 92 94 102.2% 0.0% Exceeded 94  

*Estimated 

Analysis of Performance Results 

the table presents a sample of the measures associated with 

the achievement of the revenue collection outcome. based on 

the full suite of measures relating to this outcome, during fiscal 

year 2010, treasury met or exceeded targets for 69 percent of 

its performance measures relative to this strategic outcome (27 

measures out of 39). this was a decrease from fiscal year 2009, 

when targets for 73 percent of performance measures were either 

met or exceeded. however, 50 percent of our performance 

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

strategic objective: available cash resources to operate the government 

part 2: annual performance report
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58

targets were made more aggressive in fiscal year 2010 contributing to the lower percentage of met or exceeded. two measures 

were discontinued in fiscal year 2010. 

Irs is the largest contributor to this outcome. for fiscal year 

2010, Irs achieved an overall success rate of 66 percent, 

meeting or exceeding the target for 21 of its 32 performance 

measures. In fiscal year 2010, Irs met or exceeded 56 percent 

(10 of 18) of its enforcement targets, and 50 percent (one of 

two) of its business system Modernization targets. 

In fiscal year 2010, the Irs met or exceeded 83 percent (10 

of 12) of the taxpayer service performance targets. the two 

measures that fell short of the target were the individual e-file 

rate and refund timelines, which were both within 97 percent 

of their targets. the individual e-file rate fell short of the target 

due to a higher than anticipated number of paper returns received during fourth quarter. refund timeliness fell short of the 

target due to delays caused by the computation of the Making 

Work Pay credit and the first time homebuyer credit. 

Performance at fMs was generally positive. Performance targets 

for four of fMs’s five measures were either met or exceeded in 

fiscal year 2010. fMs failed to meet its target for “unit cost to 

process a federal revenue collection transaction.” the average 

cost to process a collection item has increased in recent years 

due to a downturn in the economy, and due to additional 

development expenses related to the collections and cash 

Management Modernization (ccMM) Initiative. 

the ttb measures for this outcome, “amount of revenue per 

Program Dollar” and “Percent of Voluntary compliance from 

large taxpayers in filing tax payments timely and accurately (in 

terms of revenue),” exceeded their fiscal year 2010 performance 

targets by 19.5 percent and two percent, respectively. Voluntary 

compliance results were 94 percent of revenue, the same compliance rate achieved in 2009. amount of revenue per program 

dollar was $478, an increase from $427 in fiscal year 2009. 

Taxpayer Service and Revenue 

Processing 

Internal Revenue Service 

the Irs delivered a successful 2010 filing season, while rising 

to challenges posed by the implementation of provisions in 

the American Reinvestment and Recovery Act of 2009 (recovery 

act), the Worker, Homeownership, and Business Assistance 

Act of 2009 (Whbaa), and increased telephone demand for 

economic recovery Payment inquiries. In fiscal year 2010, the 

total revenue collected by the Irs was $2.3 trillion. results of 

the 2010 filing season include: 

•	 Processed 141.9 million individual returns and issued more 

than 109.5 million refunds totaling $366 billion, compared 

to 144.4 million returns resulting in 111.4 million refunds 

totaling $339.6 billion for the same period in 2009 

•	 achieved a 74 percent telephone level of service, an 

increase from 70 percent in 2009, while answering 36.7 

million assistor calls 

•	 Processed over 2.9 million free file returns 

•	 responded to more than 5.6 million web and 815,300 

telephone requests for information on the one time $250 

economic recovery Payment 

In fiscal year 2010, electronic filing increased compared to 2009 

results. Individual returns electronically filed increased to 69.3 

percent, up from 65.9 percent in 2009, with the total number 

of individual returns filed electronically reaching 98.4 million. 

business returns electronically filed increased 12 percent over 

2009, reaching 25.5 percent. tax professional use of e-file 

reached 62.3 million returns. filing via home-computer reached 

34.6 million returns, 7.4 percent greater than 32.2 million in 

2009. 

IRS Customer 

Service 

Representative 

Level of 

Service 

Customer Service Representative


Level of Service
 

100.0%

80.0%

60.0%

40.0%

20.0%

0.0%

Fiscal Year 

87% 83% 82% 82%

70% 74%

53%

2004 2005 2006 2007 2008 2009 2010 

strategic goal: effectively managed u.s. government finances 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

59 

“customer contacts resolved per staff year” was 10,744, 

achieving 114 percent of the target. the Irs is addressing 

demand through improved self-service options. More automated 

calls were completed, reaching 35.1 millions calls, a 21 percent 

increase from the 29 million automated calls completed in 

fiscal year 2009. the number of assistor answered calls was 36.7 

million, lower than the 39 million assistor calls answered in 

fiscal year 2009. responses to account questions received via 

the telephone were correct 95.7 percent of the time, an increase 

over the 94.9 percent accuracy achieved in fiscal year 2009. 

In addition to e-filing, Irs internet presence facilitates better 

information and service. the Irs added more automated web 

tools and services in 2010. over 213 million tax products were 

downloaded by taxpayers, an increase of almost 12 percent. 

More than 108.8 million electronic payments totaling over 

$1.9 trillion were processed through the electronic federal tax 

Payment system (eftPs). More than 66.9 million taxpayers 

used “Where’s My refund?” an increase of 23.8 percent from 

2009. the Irs website also: 

•	 Provided taxpayers with electronic tools such as the earned 

Income tax credit (eItc) assistant to determine if they 

qualify for the refundable tax credit 

•	 Provided explanations of tax benefits of the recovery act 

•	 Developed an automated service for taxpayers to obtain 

a PIn to satisfy signature requirements when e-filing a 

current year return 

•	 created a system that allows taxpayers to self screen and 

make online appointments for return preparation in the 

taxpayer assistance centers. taxpayers made approximately 19,000, or 18 percent of scheduled appointments, 

on-line 

•	 created a special section on Irs.gov titled “tax center 

to assist unemployed taxpayers” for taxpayers who are 

struggling financially 

reaching taxpayers through social media was expanded by the 

Irs during the fiscal year 2010 filing season. the Irs produced 

a number of podcasts that were available on Irs.gov and 

itunes. In addition, the Irs created youtube videos on subjects 

including the education tax credit, Making Work Pay, and 

the new homebuyer credit. Many were available in english, 

american sign language, and spanish (www.youtube.com/user/ 

irsvideos). the Irs and its partners educated and promoted asset 

building to low- and moderate- income taxpayers by creating six 

customized webcasts to cover a wide range of activities, such as 

establishing savings and Individual Development accounts (a 

special savings account where money is matched by donations), 

credit counseling, and financial coaching. 

to help taxpayers address questions, the Irs partnered with 

external stakeholder organizations to expand the availability 

and hours of service at taxpayer assistance sites. the Irs also 

helped facilitate filing compliance by developing new products 

and enhancing communication with the taxpayer community. 

the Irs updated forms and made forms accessible to the visually impaired. the Irs also translated more tax products into 

spanish and implemented a multilingual website. 

each year, the Irs and its partners provide free tax assistance to 

the elderly, disabled, and people with limited english proficiency at Volunteer Income tax assistance (VIta) and tax 

counseling for the elderly (tce) sites. In fiscal year 2010, more 

than $13.5 million in VIta and tce grants were awarded 

to 171 organizations, a 17 percent increase in the number of 

organizations from 2009. the Irs developed a “VIta site list” 

on Irs.gov to provide information on site locations throughout 

the nation, which attracted over 45,000 visits. assistors at the 

more than 12,000 VIta and tce sites throughout the nation 

prepared more than 3.1 million tax returns. the number of 

returns prepared for individuals with disabilities and/or families 

with disabled dependents increased by 99 percent, preparing 

360,500 returns, compared to 181,200 prepared in fiscal year 

2009. 

In an effort to assist the taxpayer community during the 

economic downturn, the Irs and its partners hosted five open 

house events at 200 taxpayer assistance centers (tacs) and 

partner sites across all 50 states. the goals of these events were 

to help resolve tax issues and assist taxpayers in preparation of 

tax returns. as a result, more than 31,400 taxpayers were served, 

and over 7,700 returns were prepared. other outreach efforts 

included: 

•	 held two special saturday events in which more than 


9,500 taxpayers faced with unresolved tax related issues 


were assisted, and over 4,000 returns were prepared 


•	 Provided a dedicated toll-free telephone line and hosted 

a gulf coast assistance Day at seven tacs in the gulf 

coast region, that provided guidance and assistance to 

taxpayers affected by the oil spill in the gulf of Mexico 

•	 used state-of-the-art automated check processing to 


deposit checks electronically at point of receipt at ten 


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part 2: annual performance report
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60 

tacs, thereby protecting a taxpayer’s personal identifiable 

information (PII) from identity theft when mailing checks 

to processing sites, resulting in $95 million in checks 

processed 

the Irs also assisted taxpayers who owed delinquent taxes, 

especially those who were having difficulties meeting their 

tax obligations because of unemployment or other financial 

problems, by: 

•	 granting assistors greater authority to suspend collection 

actions in certain hardship cases, preventing an automatic 

default of an installment agreement and expediting levy 

releases, if warranted 

•	 considering offers in compromise from taxpayers facing 

economic troubles, including those who were recently 

unemployed 

•	 Increasing taxpayers’ ability to speak to an assistor by 

expanding the number of call sites for taxpayers looking to 

resolve their balance due and/or delinquent return account 

while experiencing shorter wait times 

as one of the federal government’s largest benefit programs for 

working families and individuals, the earned Income tax credit 

(eItc) provides additional help for those taxpayers struggling 

financially. In fiscal year 2010, the Irs conducted its fourth 

annual eItc awareness Day in order to educate the public on 

the availability and benefits of this important tax credit. the 

Irs hoped to reach qualifying taxpayers by communicating the 

benefits of eItc through interviews, news conferences, and 

media tours. 

Alcohol and Tobacco Tax and Trade Bureau 

ttb collects excise taxes associated with the sale of alcohol, 

tobacco, firearms, and ammunition through its collect the 

revenue program. In fiscal year 2010, ttb collected $23.8 

billion in federal taxes from nearly 7,100 excise taxpayers. this 

represents a 15 percent increase in tax revenue compared with 

fiscal year 2009, collected from a taxpayer base that grew by 

only six percent. ttb collected $478 in revenue for every 

dollar spent on its revenue collection program, an 11.9 percent 

increase over the prior year. 

the increased rate of return is principally due to the higher 

federal excise tax rate imposed on tobacco products by the 

children’s health Insurance Program reauthorization act 

(chIPra), enacted in february 2009. tobacco excise tax 

collections nearly doubled between fiscal year 2008 and fiscal 

year 2009 and, in the first full year of collections under the new 

tax rate, tobacco revenues were up nearly 38 percent compared 

to the prior year. 

firearms and ammunition excise tax (faet) collections have 

also grown significantly in recent years. since ttb assumed 

responsibility for administering the faet tax program in 2003, 

collections have increased 87 percent. consumer spending 

patterns contributed to a spike in faet revenues in fiscal year 

2009, followed by a decline in collections of approximately 20 

percent in fiscal year 2010. however, faet collections remain 

15 percent above fiscal year 2008 levels, due to the enforcement 

efforts of ttb tax specialists and auditors. 

ttb expanded its electronic tax filing program to enable all 

excise taxpayers to file and pay taxes electronically through 

the Pay.gov web-based system. More than 6,400 ttb taxpayers 

are registered to use Pay.gov to pay excise taxes and file excise 

tax returns and monthly operational reports, an increase of 23 

percent over the prior year. 

the national revenue center (nrc), ttb’s tax processing 

center, receives approximately 68,000 telephone calls and 

inquiries on an annual basis. In fiscal year 2010, ttb developed 

and implemented an improved phone tree menu system for the 

main toll-free telephone number that better directs calls related 

to routine questions to clerks or contractors, and evenly rotates 

incoming calls of a technical nature to specialists. this system 

ensures that specialists’ time is reserved for more complex or 

specific questions. 

Financial Management Service 

fMs collects revenues needed to operate the federal government. In fiscal year 2010, fMs collected nearly $2.94 trillion 

through a network of roughly 9,000 financial institutions, with 

85.3 percent of the dollars collected electronically. the most 

important program that supports electronic collections is 

the electronic federal tax Payment system (eftPs), which 

supports electronic tax payments at any time. In fiscal year 

2010, more than 108 million payments were processed through 

eftPs, reflecting an increase in transaction volume of seven 

percent despite only a 3.5 percent growth in tax revenue 

collected. 

strategic goal: effectively managed u.s. government finances 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

61 

Pay.gov is a system that allows individuals and businesses to 

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

Pay.gov provides collections, form submittal, bill presentment, 

and agency financial reporting services. Pay.gov, which has been 

implemented with 153 federal agencies representing 667 cash 

flows, has collected $81.9 billion and processed 49.4 million 

transactions in fiscal year 2010. 

the Paper check conversion over-the-counter (Pcc otc) 

program converts paper checks received at federal agency 

points-of-sale locations throughout the united states and 

overseas into electronic debits to the check writer’s account 

through the automated clearing house (ach) system or into 

a substitute check image that is truncated and cleared under the 

authority of check 21. Pcc otc fully automates and improves 

the collection, reconciliation, research of returned checks, and 

reporting processes associated with the over the counter collections of federal Program agencies (fPas). Pcc otc has been 

implemented with 11 new agencies and collected $16.6 billion 

in fiscal year 2010. since the inception of Pcc otc in 2001, 

70 agencies have used the program. 

In addition, fMs is implementing collections and cash 

Management Modernization, a comprehensive effort to 

streamline, modernize, and improve the processes and systems 

supporting treasury’s collections and cash management program. 

this effort will improve financial performance by enabling 

fMs and fPas to more effectively manage financial transaction information and improve the efficiency of the collections 

information reporting processes. for example, the transaction 

reporting system is a single touch point to standardize and 

consolidate collections information and eliminate redundancies 

in the federal government’s collections reporting processes. 

additionally, partnerships are being formed with fPas to 

implement the holistic approach to improve cash management 

practices. through this effort, agencies are signing strategic 

cash Management agreements (scMas) to convert electronic 

and paper processes to more efficient electronic collection 

mechanisms. In fiscal year 2010, 11 scMas were signed. 

fMs’ Debt collection program recovers delinquent government 

and child support debt by providing centralized debt collection 

management and operational services to fPas and states as 

required by the Debt collection Improvement act of 1996 

(DcIa) and related legislation. 

In fiscal year 2010, fMs collected $5.45 billion in delinquent 

debt including economic recovery Payments in the following 

categories: 

•	 $2.10 billion in past due child support 

•	 $2.30 billion in federal non-tax debt 

•	 $435 million in state tax offsets 

•	 $618 million in tax levies 

as a result of fMs’ continued improvements to the program, 

collections have steadily increased to more than $47.9 billion 

since the enactment of the DcIa in 1996. agencies referred 

100 percent of their eligible delinquent debt at the end of fiscal 

year 2010. In calendar year 2010, Irs is expected to refer an 

additional $47.7 billion of tax debts for continuous levy, a 13 

percent increase from calendar year 2009. 

the Department of education started the federal salary offset 

Pilot in June 2010 by removing the salary bypass indicator 

from 170 of their direct loan debts. the centers for Medicare 

and Medicaid services, u.s. Postal service, u.s. army corps 

of engineers, and Defense finance and accounting service 

continue to take offsets and levies using the non-treasury 

Disbursing office process. fMs continues to roll out the state 

reciprocal Program, allowing states to submit other state debt 

to treasury offset Program (toP) for offset against federal 

vendor payments and offset of state tax and vendor payments 

to satisfy federal non-tax debt. currently, three states are 

participating in the program. fMs also continued to roll out 

Debt check, an online program used to help agencies bar 

delinquent debtors from obtaining new loans or loan guarantees. the Department of commerce’s economic Development 

administration will be the next agency to utilize Debt check. 

In addition, fMs began providing Debtor locator report data 

with partial matches to the federal and state agencies in toP. 

With partial match information, the agencies and states will be 

able update their debtor files, improve their debt matching in 

toP, and increase offset collections. 

Improving Voluntary Compliance and 

Narrowing the Tax Gap 

the Irs remains committed to finding ways to increase 

compliance and reduce the tax gap. In fiscal year 2010, the 

Irs developed new methodologies for estimating the corporate 

income tax gap; updated the estate and gift tax nonfiling and 

part 2: annual performance report

strategic objective: available cash resources to operate the government
the department of the treasury 

62 

underreporting tax gap estimates; and developed a new basis for 

estimating the individual income tax nonfiler gap. 

research allows the Irs to target specific areas of noncompliance to improve voluntary compliance and allocate resources 

more effectively to reduce the tax gap. the fiscal year 2010 

national research Program (nrP) efforts included a study to 

assess the reporting compliance of employment taxes. the study 

spans three tax years from 2008 through 2010 and examines approximately 2,200 randomly-selected taxpayers each year. this 

new study complements the ongoing study of individual reporting compliance and the study of subchapter s corporations due 

to be released in 2011. 

the Irs continues to study the effects of services it offers to 

taxpayers on the internet, at walk-in sites, and on its toll-free 

telephone lines as well as exploring the relationships between 

taxpayer errors and unclear correspondence. as part of this 

effort, the Irs is testing the impact of on-line assistance and 

instruction, and the impact of service quality to aid in the 

development of new approaches to service. 

ttb continued its efforts to promote voluntary compliance 

among industry members in 2010 through industry seminars, 

web site tutorials, and other outreach efforts. Despite the prolonged economic downturn, ttb believes its outreach efforts 

were successful in improving upon the voluntary compliance 

rate. ttb had a compliance rate of 94 percent for timely filed 

tax payments among large excise taxpayers this fiscal year. 

Enforcement 

Internal Revenue Service 

enforcement of the tax laws is an integral component of the 

Irs effort to enhance voluntary compliance. Irs enforcement 

activities, such as examination and collection, target elements 

of the tax gap and are a high priority. Dollars (in Billions) $37.6 $43.1 $47.3

$48.7$59.2$56.4$48.9$57.6

2003 2004 2005 2006 2007 2008 2009 2010 

$70.0

$60.0

$50.0

$40.0

$30.0

$20.0

IRS 

Enforcement 

Revenue 

In fiscal year 2010, the Irs met 56 percent (10 of 18) of 

examination performance measures in fiscal year 2010. of the 

eight measures that fell short of the target, two were within 99 

percent (field collection quality and collection coverage) of the 

fiscal year 2010 target, three were within 98 percent (field exam 

quality, exam quality for coordinated industry, and conviction 

rate), one was within 97 percent (exam quality – industry), 

one was within 96 percent (collection efficiency), and one 

(tax exempt/government entity (te/ge) determination case 

closures) fell within 74 percent of the target. 

of the eight Irs measures that did not meet their target, four 

were related to quality of the examination and collection 

programs. the field exam national Quality review score was 

84.9 percent, within two percentage points of the 86.3 percent 

target. examination quality for industry was 87 percent, two 

percentage points below the target. field collection quality, at 

80.6 percent, was only half a percentage point away from the 

target. Quality for coordinated industry was 95 percent, within 

one percentage point of target. Major contributors to the 

shortfall were gaps in quality related to efficient resolution of 

issues, meeting timeframes, income determination and verification, and documentation of the audit trail. 

the conviction rate in fiscal year 2010, 90.2 percent, missed 

the target of 92 percent because of the increase in the number 

of dismissals caused by unavailability of witnesses or fugitive 

subjects. these are primarily money laundering investigations 

in which more than three years passed since the date of indictment. collection efficiency and coverage were not met due to 

delays in the issuance of return delinquency notices resulting in 

fewer balance due dispositions. 

the last measure, te/ge determination case closures, was 

105,247 and fell short of the target for two reasons. first, a 

planned system conversion took longer than expected, requiring 

staff to switch to manual processing multiple times throughout 

the year. second, te/ge received 47 percent fewer applications 

of plans that required much less time (0.25 hrs) to complete 

than anticipated. 

the Irs enforcement activities, which target elements of the 

tax gap, showed steady progress, building on fiscal year 2009 

successes in key enforcement programs: 

Fiscal Year 

•	

20 percent 

strategic goal: effectively managed u.s. government finances 

total individual audits increased 11 percent $10.0

$0.0 •	 automated underreporter contact closures increased almost 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

63 

•	 number of high net-worth audits increased more than five 

percent 

•	 large corporate audits increased 8.1 percent—a significant 

achievement given the size (more than $10 million) and 

complexity of these corporate entities 

as a result of these efforts, fiscal year 2010 Irs total enforcement revenue was $57.6 billion, exceeding the $48.9 billion in 

revenue received in fiscal year 2009. 

In fiscal year 2010, the Irs placed extraordinary focus on identifying those who hide assets overseas to avoid paying taxes. as 

part of an overall strategy to improve offshore compliance, the 

Irs continued to take aggressive steps to track tax evaders who 

hide their wealth by engaging in offshore tax evasion schemes. 

the Irs more than doubled its offshore presence by opening 

new offices in asia and central america, placed additional 

law enforcement personnel at its existing offices throughout 

the world, and expanded its interaction with key international 

organizations involved in tax and financial law compliance. all 

of these steps are designed to develop new leads in ongoing 

criminal tax and financial crime investigations. 

some notable accomplishments include: 

•	 expanding international presence and coordination with 

treaty partners and international organizations to improve 

offshore compliance 

•	 establishing a global illicit financial unit to identify and 

investigate large multinational tax and financial crime 

cases generally perpetrated by organized crime syndicates 

•	 Identifying and examining 17,888 foreign resident tax 

returns with tax deficiencies totaling over $1.64 billion 

the voluntary disclosure program the Irs offered in 2009, combined with powerful whistle-blower initiatives, yielded information on illegal transactions and violations of international laws 

and fraud by banks and professionals. In fiscal year 2010, the 

Irs began reviewing the information from program participants 

to identify financial institutions, advisors, and others who 

promoted or otherwise helped u.s. taxpayers hide assets and 

income offshore. the u.s. expanded its crackdown on offshore 

tax evasion beyond the largest swiss bank to europe’s biggest 

lender by market share. the Justice Department is conducting 

criminal investigations of clients who kept accounts at overseas 

bank branches and failed to report them to the Irs. 

the pressure on offshore financial institutions known to facilitate concealment of income by u.s. citizens resulted in: 

•	 a large bank entering into a deferred prosecution agreement on charges of conspiring to defraud the united states. 

Investigations resulted in indictments or guilty pleas of 

clients and bankers on federal income tax related charges, 

including filing false income tax returns, failing to report 

foreign bank accounts, and concealing over millions in 

income subject to taxation. 

•	 a bank in scotland agreeing to forfeit $500 million as part 

of a deferred prosecution agreement. the bank violated 

the bank secrecy act (bsa) and conspired to defraud the 

u.s. by altering or removing names and references from 

payment messages to sanctioned countries, thereby allowing these entities to move hundreds of millions of dollars 

through the u.s. financial system without identification. 

•	 a swiss corporation agreeing to forfeit $536 million to 

the united states. the violations relate to transactions 

illegally conducted on behalf of customers and other 

countries sanctioned in programs administered by the 

Department of the treasury. the corporation deliberately 

removed material information from payment messages so 

that wire transfers would pass undetected through filters at 

u.s. financial institutions. 

original Issue Discount (oID) redemption is a tax scheme in 

which promoters convince taxpayers to file a series of false Irs 

forms and request fraudulent tax refunds based on fictional 

claims of large income tax withholding. the Irs identifies 

and blocks the vast majority of these refund requests, however, 

clients of these promoters are subject to significant tax, penalty, 

and interest for obtaining a fraudulent refund. In fiscal year 

2010, the Irs set up a task force to investigate oID cases 

resulting in: 

•	 100 open investigations 

•	 Decreases in frivolous returns filed from 14,290 in 2009 to 

5,540 in 2010 

•	 Decreases in frivolous refund claims from $24 trillion in 


2009 to $1.2 trillion in 2010
 

the Irs continues to ensure large corporate taxpayers are in 

compliance and use strategies that are less time and resource 

intensive. the compliance assurance Process (caP) program 

has been the most successful example of enhanced transparency 

between the Irs and large corporate taxpayers. In exchange for 

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the department of the treasury 

64 

more openness and transparency before filing, the Irs resolves 

issues early and ensures filing of accurate returns. the caP 

program allows taxpayers who identify their tax issues to get 

certainty with respect to their tax obligations at the time the 

return is filed, rather than waiting for the Irs to examine issues 

during an audit. 

the caP program benefits both the Irs and the taxpayer by 

fostering compliance, reducing the time it takes to process a 

return, and improving both customer and employee satisfaction 

while maintaining a high level of quality. In fiscal year 2010, 

participation increased to 112 corporate taxpayers, with all 102 

from 2009 returning. 

In fiscal year 2010, the Irs introduced a new quality examination process to replace the old joint audit planning process. 

the new process improves efficiency by streamlining internal 

administrative processes, increasing consistency, clearly defining 

roles and responsibilities, and providing the examination teams 

with more administrative flexibility. this approach ensures 

taxpayers are actively engaged with the audit team throughout 

the entire examination process. 

the Irs criminal investigation program continued investigating 

egregious tax, money laundering, and other financial crimes that 

adversely affect tax administration. Improved case development 

and selection methods, coupled with heightened fraud awareness resulted in the successful prosecution of taxpayers involved 

in abusive tax schemes, high income non-filers, employment 

tax evasion cases, and other flagrant forms of tax evasion. using 

its unique statutory jurisdiction and financial expertise, the 

Irs made significant contributions to important national law 

enforcement priorities. Performance levels for the Irs criminal 

investigation program remained high in fiscal year 2010, as 

indicated by the following: 

•	 completion of 4,325 criminal investigations 

•	 a conviction rate of 90.2 percent 

•	 a Department of Justice acceptance rate of 93.9 percent, 

with a u.s. attorney acceptance rate of 91.8 percent, 

which compares favorably with other federal law enforcement agencies 

•	 2,184 convictions secured 

In fiscal year 2010, the Irs continued to ensure compliance of 

exempt organizations and expanded its enforcement presence in 

the tax return preparer community. 

colleges and universities make up one of the largest non-profit 

segments in terms of revenue and assets. the colleges and 

universities project is part of an ongoing effort by Irs to review 

the largest, most complex organizations in the tax-exempt sector 

to identify issues that warrant additional guidance or scrutiny. In 

fiscal year 2010, the Irs released an interim report summarizing 

responses to compliance questionnaires sent to 400 public and 

private colleges and universities. the report discusses the respondents’ organizational structures, demographics, exempt and 

unrelated business activities, endowments, executive compensation, and governance practices. the Irs opened examinations 

on several organizations that were selected based on responses 

to the questionnaire. these examinations focus primarily on 

unrelated business income and executive compensation issues. 

In fiscal year 2010, the Irs launched a number of important 

changes to its oversight of the tax return preparer community to 

improve tax administration and tax compliance. these included 

a coordinated return preparer compliance strategy to ensure that 

the more than one million tax return preparers are competent, 

helping ensure the Irs collects the right amount of tax. key 

elements of this compliance strategy include: 

•	 requiring registration and the assignment of preparer 

tax identification number (PtIn) for all paid tax return 

preparers 

•	 establishing mandatory testing and continuing education 

for paid tax return preparers who are not an attorney, certified public accountant, or enrolled agent 

•	 Developing a public database so taxpayers can ensure their 

tax return preparer is registered with the Irs 

•	 Making all tax return preparers subject to ethical standards 

of treasury circular 230 and subject to discipline by the 

Irs 

•	 Increasing the Irs enforcement presence in the tax return 

preparer community 

In fiscal year 2010, the Irs made a number of due diligence 

visits and took enforcement actions where warranted on paid 

tax preparers resulting in the following: 

•	 completed more than 5,000 field visits to tax return 


preparers
 

•	 completed 265 undercover “shops,” of which 62 percent 

resulted in preparation of fraudulent returns during the 

2010 filing season 

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performance and accountability report | fiscal year 2010 

65 

•	 completed 165 knock and talk Visits, which identified 

at-risk tax return preparers during the 2010 filing season 

•	 achieved 91 convictions (a 100 percent conviction rate) 

on tax return preparer program criminal investigations 

•	 Promoted compliance through publicity and education by 

participating in several outreach events for the tax return 

preparer program 

Alcohol and Tobacco Tax and Trade Bureau 

In conjunction with the increased excise tax rate, chIPra 

imposed a requirement to pay a floor stocks tax (fst) on all 

tobacco products held for sale as of april 1, 2009. through onpremises visits to industry and targeted post audit verifications, 

ttb auditors enforced collection of the tobacco fst from the 

manufacturers, importers, wholesalers, and retailers who held 

tobacco products for sale at the time of the tax rate increase. 

ttb combined technology, outreach to federal and state agency 

stakeholders, and sophisticated targeting techniques to develop 

a targeted audit plan. 

using a short field examination program developed for its 

auditors and investigators, ttb completed more than 250 field 

visits to verify fst payment, which identified $10.2 million in 

additional tax, or an average underpayment of $40,000. fst 

collections to date to more than $1.3 billion. the strategic 

approach used to deploy limited staff resources enabled ttb to 

leverage its field presence to cover a wide universe of potential 

fst taxpayers without adversely impacting the bureau’s other 

audit and investigation priorities. In addition to fst examinations, ttb completed 145 targeted audits to ensure overall tax 

compliance, resulting in the identification of $7.4 million in 

additional tax, penalties, and interest in fiscal year 2010. 

tax fraud in the alcohol and tobacco industries poses a high 

risk to federal revenue collection, as well as a lucrative funding 

source for criminal or terrorist organizations. Diversion includes 

tax evasion, theft, distribution of counterfeit products, and 

distribution in the united states of products marked for export 

or for use outside the country. the Department of the treasury’s 

february 2010 report to congress on “federal tobacco receipts 

lost Due to Illicit trade and recommendations for Increased 

enforcement” estimated that the federal revenue loss on 

cigarettes diverted from lawful commercial channels may 

have reached $1.5 billion in the years prior to the tax increase 

imposed by chIPra. at the new tax rate, revenue losses 

could exceed $3 billion. In June 2010, the ttb administrator 

testified before the house Ways and Means committee, 

subcommittee on oversight regarding the illicit tobacco trade 

and ttb’s jurisdiction and enforcement profile. 

During fiscal year 2010, ttb carried out 35 joint investigations 

with various federal, state, and local law enforcement agencies, 

resulting in the seizure of more than 3,000 cases of alcohol 

beverage products and nearly 100,000 cartons of cigarettes 

having an estimated federal and state tax liability of $30 million. 

ttb closed 33 investigations involving diversion of products 

having an estimated tax liability of more than $30.3 million. as 

a result of these activities, ttb assessed or collected roughly 

$1.9 million in taxes owed. ttb is also involved in multiple 

ongoing criminal investigations of illegal activity. 

ttb collaborated with several federal agencies, international 

organizations, and other stakeholders to ensure that the revenue 

due on imported alcohol and tobacco products is collected. 

through its partnership with u.s. customs and border 

Protection (cbP), and by using data from cbP’s International 

trade Data system, ttb identified 165 entities (15 percent 

of those who imported cigarettes or other tobacco products in 

fiscal year 2010) as having imported tobacco products without 

a federal permit. ttb notified each entity to cease their illegal 

operations, and all have stopped importing or obtained a permit 

to import tobacco products. the tax value of these imports is 

$500,000. 

ttb participated with cbP and Immigration and customs 

enforcement on the fraud Investigative strike team (fIst). 

the fIst initiative addresses smuggling and fraud activity 

along united states’ borders. ttb field personnel participated 

in fIst operations in six u.s. cities with ports or international 

borders. through these efforts, ttb identified regulated 

industry members for comprehensive audits and identified more 

than $250,000 of additional excise tax liability based on these 

examinations. 

Business Systems Modernization 

Internal Revenue Service 

the Irs modernization efforts continue to focus on core tax 

administration systems designed to provide more sophisticated 

tools to taxpayers and to Irs employees. In 2010, 50 percent 

(one of two) of its business system Modernization targets were 

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the department of the treasury 

66 

achieved. the schedule variance measure was met, but only two 

of the five releases met the cost variance threshold of +/- ten 

percent. 

Irs accomplishments in fiscal year 2010 include: 

•	 customer account Data engine (caDe). caDe posted 

more than 41.2 million tax returns and processed more 

than 35.8 million refunds. for the first time, caDe posted 

more than seven million payments submitted with taxpayer 

returns and issued 8,128 savings bonds refunds. In fiscal 

year 2010, the Irs revised its caDe strategy to implement a new taxpayer account database for the 2012 filing 

season. this new database will support daily processing and 

accelerate the refund processing time for most taxpayers. 

the cost of caDe release 5.2 Milestone 4b was less than 

planned because legislative and filing season changes were 

reduced in scope and complexity. 

•	 Modernized e-file (Mef). the Irs deployed an additional 

release that enabled the acceptance of individual forms 

1040 (federal and state returns), form 4868 extensions, and 

21 other supporting 1040 forms and schedules. Modernize 

e-file release 6.1 Milestone 4a-5 required additional funding to support unplanned, required needs including disaster 

recovery activities, increased performance testing, and 

back-end validation and expanded functionality, including 

the development of a transactional national account profile. 

In fiscal year 2010, Mef accepted over 6.9 million returns. 

•	 account Management services (aMs). aMs deployed its 

final release in february 2010. the cost of aMs release 2.1 

Milestone 5 deployment was less than planned due to the 

required realignment of aMs project funds to support r1.3 

software and infrastructure design activities. since the deployment, aMs processed more than 2.3 million accounts 

and distributed more than 2.2 million electronic transcript 

cases. the final aMs release provided users the ability to 

view correspondence images online and on-demand, eliminating manual processing and reducing case cycle time from 

days to minutes. aMs also facilitated the identification of 

unallowable or fraudulent claims for first-time home buyer 

credits claimed through amended returns. 

Alcohol Tobacco Tax and Trade Bureau 

ttb continued with business application development to 

improve internal efficiency and to reduce regulatory burden on 

industry members. ttb undertook a major software development effort in fiscal year 2010 that will allow industry members 

to electronically submit new and amended permit applications 

for approval. the Permits online (Ponl) project will provide 

a secure, web-based system to support online submission, routing, and processing of original and amended permit applications. 

Ponl will allow ttb to screen and authorize applicants to operate alcohol and tobacco businesses under the Federal Alcohol 

Administration Act and the Internal revenue code. Ponl will 

reduce costs to the industry and to ttb, help meet increasing 

demand for services, and improve customer satisfaction. the 

system will be released in early fiscal year 2011. 

ttb made significant progress in its development of the 

formulas online (fonl) business application development 

project in fiscal year 2010. this system will allow industry 

members to submit beverage and nonbeverage alcohol formula 

forms and documentation via the web, and grants formula 

read access rights to certificate of label approval (colas) 

online industry users based on their permit numbers stored in 

Integrated revenue Information system (IrIs), ttb’s permit 

and tax database. this effort also enables industry members to 

register for both fonl and colas online via the web. this 

online filing solution is scheduled for release in fiscal year 2011. 

Protection of Sensitive Information 

the Irs takes the issue of identity theft very seriously. In fiscal 

year 2010, to preserve and enhance public confidence, the Irs 

advocated the protection and proper use of identity information 

by: 

•	 Placing markers on more than 284,000 taxpayer accounts 

to alert employees the account belongs to a substantiated 

identity theft victim; and 

•	 ensuring identity theft indicators and business rules isolate 

returns for additional screening to validate whether the 

true taxpayer filed the return. More than 82,000 returns 

were selected for additional screening and closed; and $245 

million was protected from being refunded to perpetrators 

on thousands of fraudulent returns. 

the Irs also protects its systems and taxpayers from evolving 

online threats. by identifying fraudulent sites and phishing 

scams, the Irs helps to reduce the number of taxpayers who 

fall victim to online fraud schemes. During fiscal year 2010, the 

Irs shut down 4,109 phishing sites (899 domestic and 3,210 

international), compared to 3,444 sites in fiscal year 2009. 

strategic goal: effectively managed u.s. government finances 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

67 

Conclusion 

the treasury Department, through its bureaus Irs, fMs, and 

ttb, was relatively successful in achieving its strategic outcome 

“revenue collected when due through a fair and uniform application of the law.” In fiscal year 2010, 69 percent of the targets 

were met or exceeded. going forward, target setting in fiscal 

year 2011 for 14 of 39 metrics (36 percent) is more aggressive 

than in 2010. 

Despite missing some key performance targets for fiscal year 

2010, such as its quality metrics, Irs generally met or exceeded 

its performance targets. the Irs remains committed to finding 

ways to increase compliance and reduce the tax gap. In fiscal year 

2010, the Irs developed new methodologies for estimating the 

corporation income tax gap; updated the estate and gift tax nonfiling and underreporting tax gap estimates; and developed a new 

basis for estimating the individual income tax non-filer gap. 

Moving Forward 

In fiscal year 2011, the Irs will focus efforts on the following 


priorities:
 

•	 Taxpayer Service – Increase the telephone level of service 

and improve the Irs website where an increasing percentage of taxpayers find the help they need 

•	 Enforcement – expand efforts to address offshore tax evasion and expand the focus on corporate and high-wealth 

returns 

•	 Business Systems Modernization – complete the new 

taxpayer account database. build and deploy advanced 

information technology systems, processes, and tools to improve Irs efficiency and productivity. ensure the privacy 

and security of data and safety and security of employees. 

•	 Human Capital – Make the Irs the best place to work in 

government 

the Irs will continue to invest in strong compliance programs, 

including a robust international enforcement initiative to address offshore tax evasion. enforcement initiatives will address 

underreporting of income associated with international activities and expand enforcement efforts on noncompliance among 

corporate and high-wealth taxpayers and the complex business 

enterprises they control (including corporations, partnerships, 

and trusts). 

In 2010, the Irs announced new recommendations to improve 

oversight of federal tax return preparers, including new registration, testing, and continuing education requirements. the 

recommendations are intended to increase taxpayer compliance 

and ensure uniform and high ethical standards of conduct for 

tax return preparers. Primary implementation of the initial 

changes is anticipated in fiscal year 2011. 

assisting taxpayers with their tax questions before they file 

prevents inadvertent noncompliance and reduces burdensome 

post-filing notices and other correspondence from the Irs. 

In fiscal year 2011, the Irs plans to increase level of service 

by adding resources to meet the ever increasing demand and 

continue to make efficiency improvements such as automated 

self-service applications that allow taxpayers to obtain information on less complex issues such as refund inquiries. these 

improvements free up staff to deal with the more complex tax 

law issues stemming from the passage of new legislation. 

Data and technology are central to the future of tax administration. In fiscal year 2011, the Irs plans to complete the 

new taxpayer account database and continue investments 

in electronic filing systems. completion of the core taxpayer 

account database is the cornerstone of Irs It modernization 

that will expedite refunds to 140 million individual taxpayers. It 

is also a prerequisite for other major initiatives, such as expansion of online paperless services. In addition, next generation 

compliance systems require a relational database structure and 

movement away from the legacy data storage model. the ability 

of the Irs to support increasingly complex taxpayer service and 

compliance initiatives will be severely limited until the new 

taxpayer account database is completed. 

Improving compliance by businesses of all sizes is important. 

specific proposals to improve compliance by businesses would: 

•	 Provide treasury regulatory authority to require that 


information returns be filed electronically
 

•	 require corporations and partnerships with assets of $10 

million or more that are required to file schedule M-3 to 

file their tax returns electronically 

•	 Provide treasury regulatory authority to reduce the current 

threshold, filing 250 or more returns during a calendar year, 

to require electronic filing of certain other large taxpayers not required to file schedule M-3 (such as exempt 

organizations) 

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68 

•	 Implement standards clarifying when employee leasing 


companies can be held liable for their clients’ federal 


employment taxes
 

•	 Increase certainty about the rules pertaining to classification of employees as independent contractors 

fMs will continue to expand the use of electronic collection 

mechanisms that use the most advanced and secure collection 

technologies that are flexible enough to accommodate the varying needs and technical sophistication of all taxpayers and fPas. 

In fiscal year 2011, ttb expects to support the Department’s 

high priority performance goal related to voluntary tax 

compliance by achieving a compliance rate of 94 percent for 

timely filed tax payments among its largest taxpayers (those 

paying more than $50,000 in excise taxes annually). ttb will 

sustain its high compliance rate through its continued efforts 

to promote industry member use of the online tax return and 

payment filing system, Pay.gov. ttb will further enhance its tax 

verification program, building on the error tracking Database 

(etD) developed in fiscal year 2010 to identify late filers, 

non-filers, and errant filings of operational reports. In fiscal year 

2011, the etD will be expanded to include operational reports 

for all ttb-regulated commodity types. ttb also intends to 

create a module in the etD to address missing and late excise 

tax returns. 

In the first full year of collections under the new tobacco tax 

rates imposed by chIPra, ttb collection efforts resulted in 

year-to-year revenue increase of 15 percent. going forward, revenue collection activities will focus both on legitimate industry 

members and those operating outside of legal distribution chains. 

ttb will continue to include in its audit plan a mix of comprehensive audits, limited scope audits, and examinations in order 

to maximize ttb’s audit resources and provide broad industry 

coverage. ttb also plans to address revenue risk areas in fiscal 

year 2011 through enhanced risk modeling and audit programs. 

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performance and accountability report | fiscal year 2010 

69 

timely anD aCCurate payments at the lOWest pOssible COst 

as the government’s financial manager, fMs oversees a daily cash flow in excess of $94 billion, disbursing over $2.3 trillion in payments to more than 100 million people. these payments include income tax refunds, social security benefits, veterans’ benefits and 

other federal payments to individuals and businesses. based on performance results, treasury was successful in achieving timely and 

accurate payments at the lowest possible cost during fiscal year 2010. 

Key Performance Measure Table 

the following table contains only key performance measures associated with this outcome. actual and target trends represent four 

years of data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/ 

management/dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011 

Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Percentage of paper check and electronic funds transfer (EFT) 

payments made accurately and on-time (%) 

FMS 100.0 100.0 100.0 100.0% 0.0% Met 100.0  

Percentage of Treasury payments and associated information 

made electronically (%) 

FMS 81.0 81.0 82.0 101.2% 1.2% Exceeded 83.0  

Unit cost for federal government payments ($) FMS $0.37 $0.40 $0.36* 110.0% -2.7% Exceeded $0.40  

*Estimated 

Analysis of Performance Results 

In fiscal year 2010, treasury exceeded targets for 67 percent and 

met targets for 33 percent of its measures related to this outcome. 

fMs has consistently made 100 percent of payments accurately 

and on-time. the percentage of payments made electronically 

increased by one percentage point, and the unit cost for federal 

government payments was down 2.7 percent, or $0.01. 

Financial Management Service 

During fiscal year 2010, fMs continued to expand and market 

the use of electronic funds transfer to deliver federal payments, 

improve service to payment recipients, and reduce government 

program costs. through fMs, treasury met or exceeded targets 

for 100 percent of its performance measures relative to this 

strategic outcome. this is in line with fiscal year 2009, when 

the bureau met or exceeded 100 percent of its targets. 

the first of the three performance measures for this strategic 

outcome concern accuracy and timeliness of payments. During 

fiscal year 2010, 100 percent of paper check and electronic 

funds transfer (eft) payments were made accurately and on 

time, matching the performance target and actual performance 

results from fiscal year 2009. 

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

the second measure is the percentage of treasury payments and 

associated information made electronically. this measure is an 

indication of the decrease in the number of paper checks issues, 

which reduces costs associated with postage, printing, and 

re-issuance of checks. overall, 82 percent of treasury payments 

and associated information were made electronically in fiscal 

year 2010 versus 81 percent in fiscal year 2009, a one percentage 

point increase. 

fMs manages several payment systems and technologies to 

promote electronic payments. the Payments application 

Modernization (PaM) is an effort to replace legacy applications 

that are used to disburse approximately one billion federal 

payments valued at over $2.3 trillion. PaM involves replacing 

over thirty applications with a single standardized application. 

In addition, fMs manages a stored Value card program that 

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70 

facilitates transactions by military personnel in remote and dangerous locations. finally, the automated standard application 

for Payments (asaP.gov) allows grantee organizations receiving federal funds to electronically draw from accounts. 

fMs’s nationwide go Direct campaign, encouraging current 

federal benefit check recipients to switch to direct deposit, is 

now in its sixth year. go Direct recently concluded an extremely 

successful fifth year in which over 1.5 million conversions were 

attributed to the campaign. the current number of total conversions obtained since the inception of the campaign in 2005 is 

five million. fMs has also facilitated unbanked federal check 

recipients to receive electronic payments through Direct express. 

More than one million people have signed up for the card since it 

was introduced in april 2008. 

the third measure is unit cost for federal government payments. 

this is a measure showing the efficiency of payments. In fiscal year 

2010, the unit cost was $0.36, a decrease from fiscal year 2009. 

Bureau of the Public Debt 

In 2010, bPD implemented an electronic payment system 

using Pay.gov that allows debtors to pay what they owe online. 

Debtors began using the system the same day it was implemented and within the first two weeks, 36 payments were received 

totaling over $11,400. earlier, in 2010, bPD implemented a 

similar system, also using Pay.gov, which allows individuals to 

give gifts online to reduce the public debt. 

Conclusion 

During fiscal year 2010, treasury, through fMs, successfully 

achieved timely and accurate payments at a unit cost of $0.36 

as indicated by having met or exceeded its performance measure 

targets. as the acceptance of electronic payments continues to 

expand, increased efficiency should result in further cost reductions. fMs is working to support greater adoption of electronic 

payments and to renovate systems that accept electronic 

payments. 

Moving Forward 

over the next fiscal year, fMs will continue efforts to expand 

electronic funds transfer, improve service to payment recipients, 

and decrease the average unit cost of payments. the fiscal year 

2011 target for percent of electronic payments is 83 percent, 

an increase of two percentage points from the fiscal year 2010 

target. fMs will also continue its go Direct campaign. for 

fiscal year 2011, fMs plans to continue issuing 100 percent of 

payments accurately and on-time. the PaM will contribute to 

more efficient processing of payments. 

strategic goal: effectively managed u.s. government finances 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

71 

gOvernment finanCing at the lOWest pOssible COst Over time 

bPD conducts the Department’s debt financing operations by issuing and servicing treasury securities. In fiscal year 2010, bPD 

conducted more than 290 auctions resulting in the issuance of more than $8.41 trillion in marketable treasury bills, notes, bonds, 

and treasury Inflation Protected securities. bPD’s government agency Investment services (gaIs) program supports federal, state, 

and local government agency investments in non-marketable treasury securities and also manages over $4 trillion in customer assets. 

based on performance results, through bPD, treasury was generally successful in achieving or exceeding the performance measures for 

government financing at the lowest possible cost over time during fiscal year 2010 by meeting or exceeding 89 percent of its targets. 

Key Performance Measure Table 

the following table contains only key performance measures associated with this outcome. actual and target trends represent four 

years of data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/ 

management/dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011

 Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Cost per debt financing operation ($) BPD $170,214 $193,962 $154,790* 120.2% -9.1% Exceeded $201,258  

Cost per federal funds investment transaction ($) BPD $41.71 $45.70 $74.05* 38.0% 77.5% Unmet $76.91  

Cost per TreasuryDirect assisted transaction ($) BPD $8.72 $8.57 $8.17* 104.7% -6.3% Exceeded $7.95  

Cost per TreasuryDirect online transaction ($) BPD $5.21 $5.69 $5.60* 101.6% 7.5% Exceeded $5.46  

Percent of auction results released in two minutes 

+/- 30 seconds (%) 

BPD 100 95 100 105.3% 0.0% Exceeded 100  

*Estimated 

Analysis of Performance Results 

the table above is a sample of the measures associated with 

the achievement of the government financing outcome. bPD 

exceeded 56 percent of its nine performance measures associated with this outcome, met 33 percent, and failed to meet 11 

percent (one measure) related to this outcome. these results 

are consistent with fiscal year 2009 performance when bPD 

met or exceeded all but one target. this year, “cost per federal 

funds investment transaction” was unmet, while bPD met the 

target for the metric it missed last year, “cost per treasuryDirect 

online transaction.” 

In order to effectively finance the u.s. government, treasury 

must efficiently execute its securities auctions. by minimizing 

the time that bidders are exposed to the risk of adverse market 

movements, participants are likely to bid at rates and yields 

more favorable to the federal government. bPD consistently 

releases securities auction results within two minutes, plus or 

minus 30 seconds, of the auction close. bPD exceeded its target 

of 95 percent for the percent of auctions with results released 

within two minutes and achieved 100 percent. 

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

In fiscal year 2010, the Department conducted over 290 government securities auctions, similar to the number conducted in 

fiscal year 2009. however, the cost per debt financing operation 

fell considerably from $170,214 in fiscal year 2009 to $154,790 

in fiscal year 2010. going forward, treasury will start to measure 

the cost of debt financing operations using a five-year rolling 

average, which will smooth out the effects of spikes in the 

number of auctions. 

In 2010, bPD made the decision to end sellDirect services 

effective December 17, 2010. this program allows investors 

who hold marketable securities in the treasuryDirect and 

strategic objective: available cash resources to operate the government 

part 2: annual performance report
the department of the treasury 

72 

legacy treasury Direct systems the option to sell their securities 

on the secondary market through the federal reserve bank of 

chicago. the decision was based on escalating operating costs, 

which would result in user fees comparable to those charged 

by brokers/dealers. transaction volumes for this service are low, 

averaging 13,000 per year. 

a key component of treasury’s retail securities programs is 

treasuryDirect, which continues to grow in size and function. 

In the past year, 99,800 new customer accounts were added 

and treasuryDirect reached a milestone one million accounts 

in august. bPD enhances the system regularly, and in 2010, the 

bureau added a streamlined process for reinvesting marketable 

securities. In addition, bPD partnered with its largest issuing 

agent, national bond and trust, to reach that agent’s customer 

base, and 12,000 new customers enrolled in treasuryDirect in 

the first half of august, up from a consistent monthly average of 

about 6,000 new accounts. overall, the cost per treasuryDirect 

online transaction was $5.60, meeting the target of $5.69, but an 

increase from the fiscal year 2009 cost of $5.21. 

the gaIs program accounts for over $6 trillion in investment 

and borrowing activities implemented by various federal, state, 

and local government entities. this year bPD completed its 

long-term goal of consolidating the entire gaIs line of business 

into one information technology system. the systems reduction 

allows Public Debt to streamline the diversity of technology 

involved in supporting gaIs programs, as well as consolidate 

and standardize internal control processes. fifty-five percent 

of gaIs customers reported overall “excellent” satisfaction 

with the program, a baseline for this new measure. In addition, 

the cost per federal funds investment transaction was $74.05, 

greater than the target of $45.70 due to a methodology change 

that better aligns costs with transactions. 

Bureau of the Public Debt 

In fiscal year 2010, treasury announced an initiative to end 

the sale of paper savings bonds through payroll savings plans 

by January 2011. throughout 2010, bPD worked with federal 

reserve banks, agents, and employers to encourage customers 

to transition to treasuryDirect. extensive outreach efforts were 

employed including: direct mail, bond inserts, use of Public 

Debt and federal reserve bank websites, on-demand webcasts 

and targeted print, and radio advertising. 

In support of the treasury-wide initiative to reduce paper, bPD 

implemented electronic issue folders for treasury’s marketable 

securities auctions. an auction issue folder, created each time a 

security was auctioned, contained up to 32 different documents 

related to auction processing. this initiative eliminated the 

retention of multiple copies of paper-based folders. 

Office of Debt Management 

the long-standing goal of the treasury’s office of Debt 

Management (oDM) is to maintain the lowest cost of borrowing over time. this objective is achieved by being regular and 

predictable with treasury debt issuance and communication to 

market participants while optimizing the size, mix, and calendar 

of debt issuance. the ability of treasury to manage the nation’s 

debt management is essential to maintaining the stability and 

integrity of the financial system. oDM pursued a number of 

policies to support the liquidity and functioning of the market 

for treasury securities. 

treasury auctions in fiscal year 2010 have witnessed unprecedented demand. on average, nominal note and bond auctions 

have been oversubscribed by 1.9 times, significantly above the 

previous record of 1.5 times in fiscal year 2009. In this strong 

demand environment, treasury extended the average maturity 

of the debt by 5 months, back to an historic average of 58 

months. after large scale changes to the auction calendar in 

fiscal year 2009, this year’s financing need have been reached 

mainly through changes to auction sizes. 

Conclusion 

In fiscal year 2010, treasury met or exceeded 89 percent of the 

targets that were established to demonstrate the achievement of 

financing the government at the lowest possible cost over time. 

there was a nearly 9 percent year over year decrease in cost per 

debt financing operation associated with the increased number 

of auctions. 

Moving Forward 

bPD will move toward an all-electronic environment for retail 

securities. although a date has not been established, proposed 

future plans include eliminating the issuance of paper over-thecounter savings bonds and decommissioning the legacy system 

strategic goal: effectively managed u.s. government finances 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

73 

for marketable securities. treasuryDirect will be enhanced to 

streamline payroll savings purchases and make it easier for 

investors to purchase securities as gifts. retail payment systems 

will be updated to refer payments to the toP to offset any debts 

that payees owe to the federal government. 

bPD is also exploring the feasibility of conducting treasury’s 

marketable securities auctions via remote access. remote access 

will strengthen bPD’s ability to continue to execute auctions in 

a contingency situation. 

along with the federal reserve bank of Philadelphia, bPD is 

working to automate the regression testing of major functionality within the treasury automated auction Processing system. 

scheduled for completion by the end of calendar year 2010, this 

project will save time and improve the quality of application 

software releases. 

the gaIs program will work to maintain a high customer 

satisfaction rating from customers. additionally, system functionality and reporting will continue to be enhanced to better 

serve customer needs. 

treasury anticipates that oDM will continue to be challenged 

given continued volatility in global financial markets. oDM 

has been working with outside consultants to develop models to 

improve its forecasting ability and is currently in the process of 

testing those models. 

strategic objective: available cash resources to operate the government 

part 2: annual performance report
the department of the treasury 

74 

effeCtive Cash management 

the treasury manages the government’s central operating account and cash position to support gross annual transactions totaling 

$24 trillion. the Department’s office of fiscal Projections (ofP) provides forecasts of federal receipts, outlays, and debt transactions 

to ensure that funds are available on a daily basis to cover federal payments. by increasing the accuracy of fiscal projections, the 

Department is able to minimize borrowing costs, which has direct and material impact on the government’s net operating cost. 

to analyze the effectiveness of the cash management techniques employed, the Department measures the variance between actual 

and projected receipts. this has been particularly challenging for the past few years due to the financial crisis. treasury did not meet 

its aggressive goal of a five percent or lower variance in fiscal year 2010. the fiscal year 2010 result is consistent with the variance in 

the past four years. 

Key Performance Measure Table 

the following table contains the key performance measure associated with this outcome. actual and target trends represent four 

years of data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/ 

management/dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011 

Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Variance between estimated and actual receipts (annual forecast) (%) DO 5.5 5 5.8 84.0% 5.5% Unmet 5  

Analysis of Performance Results 

given economic uncertainties and legislative changes, the 

forecasts for fiscal year 2010 were not as good as those for fiscal 

year 2009. the estimated variance for fiscal year 2010 is 5.8 

percent, higher than the 5.0 percent target. revenue has been 

volatile over the past few years due to the financial crisis. 

Individual tax payments in april came in below forecast as liability for tax year 2009 was much lower than expected. credits 

from the recovery act, while stimulating the economy, further 

reduced these taxes. corporate profitability and thus corporate 

tax receipts turned around, showing strong increases in fiscal 

year 2010. federal reserve earnings, reflecting the increase in 

securities held by the federal reserve, more than doubled from 

their level in fiscal year 2009. 

Conclusion 

ofP continues to effectively manage the government’s daily cash 

position and to minimize borrowing costs over time to ensure 

that government activities and services continue uninterrupted. 

Despite not meeting the targeted variance between forecast and 

actual budget receipts, ofP continues to update and modify 

existing models and monitor new initiatives as they are introduced. the actual results came in close to the target considering 

the volatility and extent of the current economic environment. 

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

Moving Forward 

treasury anticipates that forecasting government receipts and 

outlays in fiscal year 2011 will continue to be challenging due to 

the difficulty in forecasting the strength of the current recovery. 

Volatility caused by changing economic conditions and new 

programs enacted by congress will have to be accounted for in 

current forecasting models. 

further, treasury is currently working to enhance its forecasting ability. ofP is in the process of developing a new system 

to create and manage its forecasts and expects this system to 

facilitate and strengthen its estimation process. the targeted 

variance between estimated and actual receipts will continue to 

be 5 percent in fiscal year 2011. 

strategic goal: effectively managed u.s. government finances 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

75 

aCCurate, timely, useful, transparent anD aCCessible finanCial 

infOrmatiOn 

the government-wide accounting and reporting Program maintains the federal government’s books and accounts for its monetary assets and liabilities by operating and overseeing the government’s central accounting and reporting system. based on performance results, 

treasury was successful in achieving accurate, timely, useful, transparent and accessible financial information during fiscal year 2010. 

Key Performance Measure Table 

the following table contains only key performance measures associated with this outcome. actual and target trends represent four 

years of data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/ 

management/dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011 

Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Cost per summary debt accounting transaction ($) BPD $8.66 $11.81 $11.41* 103.4% 31.8% Exceeded $12.54  

Release federal government-wide statements on time DO 1 1 1* 100.0% 0.0% Met 1  

Percentage of government-wide accounting reports issued 

accurately (%) 

FMS 100 100 100 100.0% 0.0% Met 100  

Percentage of government-wide accounting reports issued 

timely (%) 

FMS 100 100 100 100.0% 0.0% Met 100  

Unit cost to manage $1 million dollars of cash flow ($) FMS $7.08 $11.77 $7.36 139.8% 4.0% Exceeded $10.15  

*Estimated 

Analysis of Performance Results 

fMs met or exceeded all three of its performance targets for 

this strategic outcome during fiscal year 2010. the unit cost to 

manage one million dollars of cash flow was $7.36, substantially 

lower than the $11.77 target but above the $7.08 level achieved 

in fiscal year 2009. fMs also met both its targets of 100% for 

accurate and timely reports on government-wide accounting. 

bPD surpassed the target for its performance measure “cost per 

summary Debt accounting transaction.” the cost was $11.41 

in fiscal year 2010, below the target of $11.81. however, the 

cost was 32 percent above the fiscal year 2009 actual of $8.66. 

Financial Management Service 

the Department, through fMs’ government-wide accounting 

and reporting Program, maintains the federal government’s 

books and accounts for its monetary assets and liabilities by 

operating and overseeing its accounting and reporting system. 

the consolidated financial report of the united states 

government (fr) provides a comprehensive view of the 

federal government’s finances and is critical to a fully informed 

budget process. fMs met the 45-day reporting deadline for the 

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

past five years for the fr. however, in fiscal year 2009, the 

oMb extended the release date of the financial report to 

february 26, 2010, due to substantial reporting requirements of 

the recovery act. the Department anticipates a return to the 

regular release schedule for the fiscal year 2010 fr of just 75 

days after the close of the fiscal year. 

to complement and support the accelerated release of the fr, 

treasury continues to release the Monthly Treasury Statement on 

the eighth workday of each month. this release schedule allows 

treasury to provide agency financial managers complete and 

accurate financial data more often as a basis for preparation of 

their financial statements. 

strategic objective: available cash resources to operate the government 

part 2: annual performance report
the department of the treasury 

76 

office of the fiscal assistant secretary (ofas), in cooperation with oMb, and with the support of the government 

accountability office (gao) develops, produces, and issues 

The Federal Government’s Financial Health – A Citizens’ Guide 

to the Financial Report of the U.S. Government. this guide 

provides a summary of the key data and issues addressed in the 

full fr in a manner that is user-friendly to the general public. 

the government-wide accounting (gWa) Modernization 

Program is improving long standing federal accounting processes 

and provides agencies with methodologies and tools to improve 

the accuracy and consistency of their financial data. this multiyear effort will improve the reliability, usefulness, and timeliness 

of the government’s financial information and provide agencies 

and other users with better access to that information. It will 

also eliminate duplicate reporting and reconciliation burdens by 

agencies, resulting in significant government-wide savings. 

to date, the program has implemented several improvements 

to provide agencies more timely data and enhanced tools to 

reconcile their fund balances with treasury. the authority 

transaction Module automated the processes for borrowing 

from treasury, non-expenditure transfers, and appropriation 

warrant transactions. the Provisional account statement now 

provides gWa reporting organizations the capability to view 

their submitted transactions on a daily basis, permitting a daily 

reconciliation of fund balances. 

Bureau of the Public Debt 

through its summary Debt accounting program, bPD continues to reliably account for the borrowing activity of the federal 

government and report timely on the resulting debt. During 

fiscal year 2010, 100 percent of daily financial statements 

were produced within three business days, and 100 percent of 

monthly ledgers closed within one business day. as noted in the 

Schedules of Federal Debt, these accomplishments contributed to 

continuous unqualified audit opinions and no material weaknesses of internal controls. 

Conclusion 

fMs continues to make improvements to its policies, procedures, information systems, and internal controls associated 

with compiling and issuing the fr. gao closed two of 44 

recommendations in the fiscal year 2009 audit report. fMs 

will continue to resolve the preparation issues that are within 

its realm of control. ofas continues to oversee increased 

efforts to resolve the significant disclaimers that have impacted 

the government-wide audit for more than a decade, including 

the development of a general fund reporting entity, which is 

intended to facilitate interagency accounting, promote centralization and efficiency, and improve data integrity. 

Moving Forward 

treasury will continue to work to produce more accurate and 

useful financial statements and reports for the public. the 

financial Information and reporting standardization (fIrst) 

initiative addresses the core of federal financial management 

problems, which is improving the quality of agency accounting. once this foundation is in place, the federal government 

will be in a position to receive a clean audit opinion on the 

financial report of the u. s. government. More importantly, 

fIrst will be the foundation for a central repository of accurate financial information. 

early in fiscal year 2011, the gWa Modernization Program will 

implement enhancements to all of its public facing components to allow agencies to enter and review the component 

based treasury account symbol as published in the common 

government-wide accounting classification code July 2007 

Version 1.0 Document. additionally, in mid fiscal year 2011, 

the program will implement the first non-treasury Disbursed 

organization as a gWa reporter. additionally, the new 

classification transaction and accountability Module will be 

deployed in 2011, facilitating the ability of agencies to more 

quickly transition to becoming gWa reporters. 

bPD will continue to accurately account for and report on 

federal debt. bPD will modernize its current summary debt 

accounting system and has established a goal to migrate to a 

shared service solution by fiscal year 2013. this approach will 

standardize business, system, and data elements and reduce 

operational risk and costs. 

strategic goal: effectively managed u.s. government finances 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

77 

strategic goal: 

u.s. anD WorlD econoMIes PerforM at full 

econoMIc PotentIal 

strategic objective: 

improved economic opportunity, Mobility, and security with robust, 

real, sustainable economic Growth at Home and abroad 

economic growth stimulates economic opportunity, mobilPromoting the development of new markets in the u.s. ensures 

ity, and security for americans and others around the world. 

that all americans benefit from economic growth. the expansion of underdeveloped economies abroad opens markets, 

enhances regional stability, reduces the spread of disease, creates 

opportunities for profitable trade, and demonstrates democracy 

in action. treasury promotes economic growth through direct 

and indirect regulation of financial markets; regulation of 

national banks and thrifts; implementation of policies promoting international trade, investment, and economic security; 

programs encouraging investment in economically distressed 

communities; and policy initiatives directed at expanding the 

capacity of financial institutions to provide affordable credit, 

capital, and financial services to the american people. 

the bureaus and offices responsible for achievement of this 

objective are: 

•	 alcohol and tobacco tax and trade bureau (ttb) 

•	 community Development financial Institutions fund 

(cDfI fund) 

•	 the office of the comptroller of the currency (occ) 

•	 the office of Domestic finance 

•	 the office of economic Policy 

•	 the office of International affairs 

•	 the office of thrift supervision (ots) 

•	 the office of financial stability (ofs) 

Performance measures associated with this objective had 24 

percent more aggressive targets compared to 2009. 

the outcomes associated with this objective are: 

•	 strong u.s. economic competitiveness 

•	 competitive capital markets 

strategic objective: improved economic opportunity, mobility and security

with robust, real, sustainable economic growth at home and abroad 

•	 free trade and investment 

•	 Prevented or mitigated financial and economic crises 

•	 Decreased gap in global standard of living

Budget Trend 

Improved 

Economic 

Opportunity, 

Mobility, and 

Security with 

Robust, Real, 

Sustainable 

Economic 

Growth at 

Home and 

Abroad 

Performance 

Cost Trend 

Improved 

Economic 

Opportunity, 

Mobility, and 

Security with 

Robust, Real, 

Sustainable 

Economic 

Growth at 

Home and 

Abroad 

Fiscal Year 

$2,000,000

$825,793$874,059$975,283$1,057,863$1,383,230$1,678,247$1,627,776 

2004 2005 2006 2007 2008 2009 2010 

Dollars (in Thousands) Dollars (in Thousands) $1,500,000

$1,000,000

$500,000

$0

$1,500,000

$829,468$927,076$1,016,696$1,077,080$1,162,382$1,423,847$1,403,829 

2004 2005 2006 2007 2008 2009 2010 

$1,200,000

$900,000

$600,000

$300,000

$0

Fiscal Year 

Performance Cost 

by Outcome 

Improved 

Economic 

Opportunity, 

Mobility, and 

Security with 

Robust, Real, 

Sustainable 

Economic 

Growth at 

Home and 

Abroad 

1.2% Decreased gap in 

global standard of living 

74.2% Prevented 

or mitigated 

financial and 

economic crises 

.08% Free trade and 

investment 1.5% Competitive 

capital markets 

22.3% Strong 

U.S. economic 

competitiveness 

part 2: annual performance report
the department of the treasury 

78 

assessing the effeCtiveness Of 

eCOnOmiC pOliCy 

the Department’s economic policy efforts can be separated 

into two categories: policy initiatives and established programs. 

Differences between them largely correspond to timing in 

the policy process. Policy initiatives are efforts to influence 

economic growth and financial market activity through new legislative proposals or government-wide policy. the Management 

Discussion and analysis in Part one covers policy initiatives. 

established programs are typically already defined by law or 

administrative function and have specific objectives and management scope. for performance management, it is generally 

easier to assess the performance of established programs, given 

their clearer objectives and scope. Most of the Department’s 

performance measures consequently assess established programs 

and not policy initiatives. 

strategic goal: u.s. and world economies perform at full economic potential 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

79 

strOng u.s. eCOnOmiC COmpetitiveness 

strong u.s. economic competitiveness is crucial for robust economic growth worldwide, continued investment in the united states, 

and job creation. the treasury Department develops policies and programs intended to promote a prosperous financial infrastructure, 

a balanced macroeconomy, market efficiency, technological readiness, and innovation. for fiscal year 2010, treasury generally met or 

exceeded its performance targets for established programs promoting u.s. economic competitiveness. 

Key Performance Measure Table 

the following table contains key performance measures associated with this outcome. actual and target trends represent four years of 

data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/management/ 

dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011 

Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Annual percentage increase in the total assets of Native CDFIs (%) CDFI 23 15 26 173.3% 13.0% Exceeded 19  

Commercial real-estate properties financed by BEA Program applicants 

that provide access to essential community products and services in 

underserved communities 

CDFI 500 285 283 99.3% -43.4% Unmet DISC  

Community Development Entities' annual investments in low-income 

communities ($ billions) 

CDFI $3.60 $2.50 $3.10 124.0% -13.9% Exceeded $2.50  

Community Development Entities' cumulative investments in low-income 

communities ($ billions) 

CDFI $12.50 $10.00 $15.80 158.0% 26.4% Exceeded $10.00  

Dollars of private and non-CDFI Fund investments that CDFIs are able to 

leverage because of their CDFI Fund Financial Assistance ($ millions) 

CDFI $1,298 $600 $1,989 331.5% 53.2% Exceeded $1080  

Increase in community development activities over prior year for all BEA 

program applicants ($ millions) 

CDFI $292 $210 $290 138.1% -0.7% Exceeded $210  

Increase in the percentage of eligible areas served by a CDFI CDFI 25.1 21 27.5 131.0% 9.6% Exceeded 20  

Number of full-time equivalent jobs created or maintained in underserved 

communities by businesses financed by CDFI program awardees 

CDFI 70,260 85,000 80,796 95.1% 15.0% Unmet 85,000  

Number of small businesses located in underserved communities 

financed by BEA Program applicants 

CDFI 640 252 1005 398.8% 57.0% Exceeded 250  

Percent of CDFIs that increased their total assets (cumulative) (%) CDFI 88 65 84 129.2% -4.6% Exceeded 60  

Percent of CDFIs that increased their total assets over the previous year (%) CDFI 69 66 52 78.8% -24.6% Unmet DISC  

Percentage of eligible areas served by one or more CDFI (%) CDFI 14.8 5 16.6 332.0% 12.2% Exceeded DISC  

Percentage of loans and investments that went into severely distressed 

communities (%) 

CDFI 81 66 73.4 111.2% -9.4% Exceeded 66  

Average number of days to process an original permit application at the 

National Revenue Center (%) 

TTB 64 72 65 109.7% 1.6% Exceeded 70  

National Revenue Center (NRC) customer satisfaction survey TTB 89 85 89 104.7% 0.0% Exceeded 85  

Percent of electronically filed Certificate of Label Approval applications (%) TTB 74 78 79 101.3% 6.8% Exceeded 81  

Percentage of importers identified by TTB as illegally operating without 

a Federal permit (%) 

TTB 15 19 15 121.1% 0.0% Exceeded 15  

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

Legend Symbol 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

strategic objective: improved economic opportunity, mobility and security

with robust, real, sustainable economic growth at home and abroad 

part 2: annual performance report
the department of the treasury 

80 

Analysis of Performance Results 

Performance for established programs promoting strong u.s. 

economic competitiveness exceeded target levels for 56 percent 

of measures, met targets for 32 percent of measures, and did not 

meet target levels for 12 percent of measures. five performance 

measures were discontinued. cDfI fund met or exceeded 18 of 

its 21 active performance measures, while ttb exceeded its four 

active performance measures. these results indicate that these 

programs generally succeeded in achieving their performance 

goals, although targets may need to be set more aggressively in 

some cases. 

Community Development Financial 

Institutions Fund 

the cDfI fund promotes economic opportunity by expanding 

the capacity of community development financial institutions 

to provide capital, credit, and financial services to underserved 

populations and economically distressed communities in the 

united states. the cDfI fund receives applications on an annual basis and awards funds through a competitive process. the 

fund’s fiscal year 2010 activities can be broken up into six program areas: financial and technical assistance (cDfI Program), 

new Markets tax credits Program (nMtc Program), native 

Initiatives, bank enterprise award Program (bea Program), 

financial and education counseling Pilot Program (fec Pilot 

Program), and the capital Magnet fund (cMf). 

•	 the cDfI Program in fiscal year 2010 awarded $104.8 million in funding to 179 community development financial 

institutions (cDfIs) and organizations to provide loans, 

investments, financial services, and technical assistance to 

underserved populations and low-income communities. In 

fiscal year 2010, the cDfI Program met its administrative 

target for cycle time from application deadline to the date 

of award announcement. the cDfI Program also met its 

administrative target of disbursing at least 85 percent of 

award funds in 60 days from the date of announcement. 

Due to increased program funding associated with the 

economic downturn, cDfIs were able to attract $1,989 

million in private investment, far more than the target of 

$600 million. cDfIs provided funds for projects that created or maintained 80,796 jobs, which in the aftermath of 

the recession is lower than the target of 85,000 jobs. since 

its inception in 1994, the cDfI fund has awarded over 

$932 million through the cDfI Program. 

•	 the nMtc Program, which provides tax credit allocation 

authority to cDes for targeted investments in low-income 

communities, awarded $5 billion in tax allocation authority, including both the recovery act and regular tax credit 

authority. cumulative investments in low-income communities rose to $15.8 billion, exceeding the performance 

target, an increase of $3.1 billion over the prior year. 

allocatees projected 77,000 jobs will be created which 

would exceed the target of 60,000 jobs. 

•	 naca provides financial assistance, technical assistance, 

and training to native american cDfIs and other native 

entities seeking to become or create native american 

cDfIs. naca awarded $10.3 million in financial and 

technical assistance to 45 organizations. the naca 

program disbursed 85 percent of both award fund rounds 

(recovery act and regular appropriations) 60 days from announcement. the naca program registered a 26 percent 

increase in the total assets of naca awardees, thereby 

exceeding its target. 

•	 the bea Program, which provides cash awards to banks 

for increasing their investment in low-income communities and cDfIs, registered an increase in community 

development activities. fiscal year 2010 bea Program 

awardees increased their qualified community development 

activities by $343.4 million over the prior fiscal year. this 

included a $276.2 million increase in loans and investments in distressed communities, a $53.4 million increase 

in loans, deposits, and technical assistance to cDfIs, 

and a $13.8 million increase in the provision of financial 

services in distressed communities. In fiscal year 2010, the 

bea Program met its administrative cycle time target for 

processing applications to the date of award announcement 

in 21 weeks (which was less than the six month target). 

the bea Program met its administrative cycle time target 

for disbursing at least 85 percent of the award funds within 

60 from the date of award announcement. 

•	 the fec Pilot Program provides grants to organizations to 

establish and expand financial education and counseling 

services for prospective homebuyers. a total of $2 million 

was awarded equally to five organizations. 

•	 the cMf will provide $80 million in grants to cDfIs and 

qualified nonprofit housing organizations in fiscal year 2011 

following an application cycle which began in fiscal year 

2010. cMf awards can be used to finance affordable housing activities, related economic development activities, 

strategic goal: u.s. and world economies perform at full economic potential 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

81 

and community service facilities. applications identified 

proposed housing projects in 49 states, the District of 

columbia, and Puerto rico and requested more than $1 

billion in grants that would leverage an estimated $23.38 

billion in total investments. the cDfI fund met the 

application-award cycle time of 6 months with an application deadline of april 15 and an award announcement date 

of october 14, 2010. 

Protecting the Public through Alcohol 

and Tobacco Regulation 

ttb uses its label approval, formula approval, and product 

integrity enforcement functions to protect alcohol consumers 

from fraud and deception. ttb received and processed about 

6,700 domestic and imported alcohol beverage formulas and 

laboratory analyses to ensure that all ingredients met the food 

and Drug administration (fDa) food safety standards and 

were properly classified for tax and labeling purposes. before 

alcohol beverages can be introduced into interstate commerce, 

a certificate of label approval (cola) or an exemption must 

be obtained from ttb by the importer or bottler. ttb seeks to 

protect consumers through its permitting process, ensuring that 

operators in the alcohol and tobacco industries are qualified. In 

fiscal year 2010, ttb issued 5,770 original and 18,200 amended 

permits; the total number of regulated industry members is now 

well over 52,000. ttb averaged 65 days to process original 

permit applications. expeditiously processing permit applications allows qualified persons to commence operations sooner, 

and contributes to the overall growth and health of the u.s. 

and global economy. additionally, through its screening process, 

ttb works to prevent illegal operations in the alcohol and 

tobacco industries. because alcohol and tobacco trade is a lawful 

trade, and subject to substantial tax, it provides a compelling 

venue for organized crime and terrorist organizations to use the 

commodities for unlawful profits. 

In fiscal year 2010, ttb approved 102,500 (78 percent) of the 

132,600 cola applications received; the remaining 30,100 

applications were either rejected, returned for correction, withdrawn, expired, or surrendered. applications received increased 

by more than six percent over fiscal year 2009, bringing total 

applications back to levels seen in 2008. as of august 23, 2010, 

79 percent of the applications received were filed electronically 

through ttb’s electronic label application system, colas 

online, an increase of 5 percent over the prior year. usage rates 

for the colas online have increased more than 75 percent 

since the end of fiscal year 2003 when the system was introduced. ongoing system enhancements and outreach efforts have 

contributed to high adoption rates. 

In fiscal year 2010, ttb investigators closed more than 560 field 

investigations into permit applications, product integrity, and 

consumer complaints, and continued work on 280 in-progress 

investigations. to increase program effectiveness ttb revised 

its operating plan, directing resources to more complex and 

long-term investigations. under the plan, ttb reduced its 

caseload to enable more in depth reviews of civil violations to 

determine if criminal conduct was involved. the flexibility built 

in to the new operating plan allowed ttb to redirect resources 

to address a scandal involving the fraudulent labeling of wine 

imported as Pinot noir from france. ttb’s work prevented 

approximately 1.9 million bottles of mislabeled Pinot noir wine 

from reaching u.s. consumers in the marketplace. 

ttb’s International trade program helps keep the u.s. economy strong by facilitating import and export trade in alcohol and 

tobacco products, while administering the consumer protection 

standards provided under its jurisdiction. by maintaining and 

enhancing collaboration with its counterpart regulators in 

foreign countries, ttb ensures that products entering the u.s. 

market are safe and compliant. ttb made significant progress in 

working with foreign counterparts and negotiating international 

agreements. Memoranda of understanding (Mous) in progress 

will facilitate trade by increasing mutual understanding of each 

country’s alcohol and tobacco production requirements, labeling 

and licensing standards, and revenue protection measures. 

these agreements also provide a formal process whereby each 

party can exchange information that has the potential to impact 

trade, regulatory compliance, and product safety. 

Improving Access to Financial Services 

and Promoting Financial Capability 

the office of financial education promotes policies and 

programs that help empower americans with the knowledge 

and skills they need to make wise financial choices. the office 

also works to expand access to financial services for those 

outside the financial mainstream, such as americans without 

bank accounts. Individuals and families with strong financial 

capabilities and access to financial services are more likely to 

be financially stable and invest for future goals such as homeownership, education, and retirement. the office launched a 

pilot to help use tax refund season as an opportunity to provide 

strategic objective: improved economic opportunity, mobility and security

with robust, real, sustainable economic growth at home and abroad 

part 2: annual performance report
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82 

unbanked and underbanked americans with access to safe, 

low-cost financial accounts. 

recent financial education efforts include launching an 

enhanced nationwide “financial capability challenge” with 

the Department of education to improve high school students’ 

financial capabilities; providing leadership and support to the 

multi-agency financial literacy and education commission, 

which promotes federal interagency collaboration on financial 

education; overhauling the financial literacy and education 

commission’s financial education website, www.MyMoney.gov, 

to make it a more powerful tool for consumers; and developing a 

national strategic plan to promote financial literacy. 

Conclusion 

the cDfI fund increased essential financial support to 

institutions serving low-income communities and underserved 

populations in the u.s. through its programs and initiatives, 

the cDfI fund enabled locally-based organizations to further 

economic development related to affordable housing, small 

businesses, community facilities, and community development 

financial services. to improve program management, the cDfI 

fund has initiated development of new performance measures. 

ttb’s Protect the Public program exceeded all of its performance targets in fiscal year 2010. ttb’s efforts to boost 

electronic filing of alcohol beverage label applications resulted 

in performance results that exceeded the fiscal year target and 

improved upon 2009 performance results by seven percent. the 

bureau’s rate of customer satisfaction with the permit and claims 

processing services at the nrc did not change from the prior 

year but efforts to improve turnaround times still helped ttb 

achieve a level of customer satisfaction five percent greater than 

its target. ttb’s push for processing efficiency resulted in an 

average cycle time of 65 days to process an original permit application, better than its target of 72 days. however, this is one 

day longer than the 2009 average cycle time. ttb’s ongoing 

mission to protect the public through improved enforcement 

is further evidenced by ttb’s identification of only 15 percent 

of importers operating without a permit, unchanged from 

2009. this measure gauges the threat to consumers and federal 

revenue collection by illicit import activity. ttb is reviewing 

alternative methods to assess importer compliance. 

Moving Forward 

economic recovery in low-income communities has historically 

lagged recovery elsewhere in the country. like the communities 

they serve, cDfIs were hit especially hard by the economic 

downturn, and have found it more challenging to obtain sources 

of capital. In response, the cDfI fund has been asked to implement several new programs and expand existing core programs. 

these initiatives will enable the cDfI fund to expand assistance 

to underserved communities in new and highly focused ways. 

In order to keep pace with this growth, the cDfI fund has 

several priority projects planned for fiscal year 2011. the cDfI 

fund is streamlining and enhancing its It systems and data 

management processes to ensure there is sufficient capability to 

handle increased application workloads and the implementation 

of new programs. the cDfI fund will continue to evaluate the 

high demand and impact of its programs and devise additional 

strategies to help meet those demands. the cDfI fund will also 

evaluate innovative financial tools to promote access to capital 

and stimulate local economic growth. finally, the launch of an 

enhanced compliance, monitoring, and certification effort is 

underway to ensure that cDfIs are satisfying all requirements. 

In fiscal year 2011, ttb will continue to inform industry 

members of the benefits of e-filing and will continue to provide 

system demonstrations and publish online guidance to the user 

community. the introduction of formulas online (fonl), 

the new e-filing system that enables the online submission of 

alcohol beverage formulas, will also support increased user rates 

for colas online. the integration of fonl with the existing 

colas online system will streamline the process of obtaining 

both formula and label approval for those in the alcohol beverage trade. ttb adjusted its targets for fiscal year 2011 in response 

to the noncompliance rates reported in the last two years. 

even during the economic contraction, applications to open 

new businesses in the alcohol and tobacco industries continued 

to rise. original permit applications have grown 19 percent over 

the last five years, and four percent in the last fiscal year. to address growing workloads, ttb purchased a commercial product 

to enable the electronic submission and processing of original 

and amended permit applications. In fiscal year 2011, ttb will 

begin its phased release of the new Permits online (Ponl) 

system. the first phase will enable electronic filing for the three 

highest volume permit areas. ttb anticipates increased cusstrategic goal: u.s. and world economies perform at full economic potential 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

83 

tomer satisfaction as applicants experience faster response times 

and the ease of using the electronic filing system. additionally, 

to streamline the permit application process, ttb created a task 

force to analyze and improve ttb bond forms, instructions, and 

internal business processes to improve service to industry. 

ttb will continue to monitor imports of tobacco products by 

non-permitted entities, placing special emphasis on enforcing 

the Prevent All Cigarette Trafficking Act (Pact), legislation 

enacted in april 2010 to prevent tobacco smuggling and ensure 

the proper payment of all tobacco taxes. the methods most 

commonly used to import tobacco products without a permit 

and without payment of the appropriate taxes are internet and 

mail-order purchases. the Pact act prohibits shipments of 

tobacco products via the u.s. Postal service (usPs). In fiscal 

year 2011, ttb will coordinate with the usPs and other common carriers to provide enforcement assistance. furthermore, 

under chIPra, all importers of processed tobacco are required 

to obtain an importers permit from ttb. In the year ahead, 

ttb will assess the number of legitimate importers of processed 

tobacco and ensure they apply for and obtain a permit or cease 

importations. 

COmpetitive Capital markets 

Prosperous capital markets play an important role in facilitating 

economic growth by inspiring investor confidence and ensuring 

fair asset pricing. treasury strives to preserve the integrity of the 

u.s. market, which is essential to maintaining effectiveness. 

robust supervision and regulation of financial firms, more 

comprehensive supervision of financial markets, provisions 

to protect consumers and investors from financial abuse, and 

establishment of viable government tools to manage financial 

crises are fundamental to a thriving and competitive financial 

system. 

for a description of treasury’s initiatives associated with 

the maintenance of capital market stability, please refer to 

Management’s Discussion and analysis and the “Prevented and 

Mitigated financial and economic crises” section. 

strategic objective: improved economic opportunity, mobility and security

with robust, real, sustainable economic growth at home and abroad 

part 2: annual performance report
the department of the treasury 

84 

free traDe anD investment 

open foreign and domestic markets for goods and services are vital for a robust, growing, and sustainable u.s. economy. treasury 

continues to work with other agencies to fight protectionism and maintain open markets for american products and services. for 

fiscal year 2010, treasury exceeded its performance targets for programs seeking to promote free trade and investment. 

Key Performance Measure Table 

the following table contains key performance measures associated with this outcome. actual and target trends represent four years of 

data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/management/ 

dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011 

Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Number of New Trade and Investment Negotiations 

Underway or Completed 

DO 15 6 13 216.7% -13.3% Exceeded 6  

Number of specific new trade actions involving Treasury 

interagency participation in order to enact, implement and 

enforce U.S. trade law and international agreements 

DO 98 40 83 207.5% -15.3% Exceeded 50  

Analysis of Performance Results 

Performance for programs aimed at promoting free trade and 

investment greatly exceeded target levels for both measures. 

While actual results decreased from their 2009 levels, performance stayed well above operational targets for the year. this 

performance reflects the aggressive role treasury is taking to 

strengthen international trade partnerships. 

Maintaining Attractiveness of Investment 

and Trade Environment 

Maintaining the attractiveness of Investment and trade environment in a global economy requires coordination with and 

the cooperation of international partners. In this area, treasury 

worked with partners to improve joint stewardship of the global 

economy and has continued to play a leading role in advocating 

for a stronger and safer global financial system while fighting 

against protectionism. 

•	 treasury helped advance strategic & economic Dialogue 

(s&eD) trade issues with china, in particular indigenous 

innovation, government procurement, and investment 

liberalization, to ensure that u.s. invested companies and 

exports are treated fairly. 

•	 treasury supports trade liberalization and budget discipline 

through its role in negotiating, implementing, and policing 

international agreements to reduce official export subsidies. 

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

treasury drastically reduced the number of subsidies that 

organization for economic co-operation and Development 

(oecD) member governments can provide when financing 

national exports. the oecD agreements open markets 

and level the playing field for u.s. exporters and save u.s. 

taxpayers about $800 million annually. 

•	 treasury has actively engaged in interagency deliberations and decisions impacting more than 80 specific trade 

actions, including trade legislation (generalized system of 

Preferences and andean trade Preferences act extensions 

and enactment of the haiti economic lift Program act), 

trade disputes, review of country eligibility for preference programs, and review of specific trade petitions and 

recommendations. 

•	 u.s initiatives to negotiate trade and investment agreements, particularly with regard to financial services and 

strategic goal: u.s. and world economies perform at full economic potential 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

85 

financial transfers, were advanced by treasury. treasury 

participated in the launching, negotiation and, implementation of 13 trade and investment agreements. the centerpiece of the fiscal year 2010 trade agenda was the commencement of negotiations of the trans-Pacific Partnership 

(tPP) agreement, which includes australia, new Zealand, 

singapore, chile, Peru, brunei, Malaysia, and possibly 

Vietnam. successful conclusion of the tPP agreement, 

which could serve as a platform for economic integration 

across the asia-Pacific region, can help america ensure 

its share of the job-creating economic opportunities this 

region has to offer. 

•	 efforts were made to further advance an ambitious and 

balanced Doha round that would provide substantial new 

market access, and to address outstanding concerns with 

pending free trade agreements with korea, colombia, and 

Panama. Intensified engagement is expected to continue 

during the next fiscal year. In addition, several negotiations 

of bilateral Investment treaties are expected to continue. 

Conclusion 

Improving trade and investment linkages with international 

partners is essential to sustaining the u.s. economy in a global 

market. to that end, treasury exceeded its targets with regard 

to trade and investment negotiations, as well as trade actions. 

however, measures should be reassessed since results are heavily 

dependent on actions not necessarily within treasury’s control. 

Moving Forward 

the Department will continue to play a critical role in advocating for free trade and preventing the effects of the global recession from leading to increased protectionism. In fiscal year 2011, 

treasury is committed to moving forward with the pending free 

trade agreements with korea, columbia, and Panama as soon 

as possible. however, progress towards the Department’s goals 

could be slowed if weaker economic conditions persist. 

strategic objective: improved economic opportunity, mobility and security

with robust, real, sustainable economic growth at home and abroad 

part 2: annual performance report
the department of the treasury 

86 

preventeD Or mitigateD finanCial anD eCOnOmiC Crises 

treasury has been at the forefront of the u.s. government’s response to the financial crisis and economic recession. through implementation of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-frank act), Housing and Economic Recovery Act 

of 2008 (hera), Emergency Economic Stabilization Act of 2008 (eesa), American Recovery and Reinvestment Act of 2009 (recovery 

act), coordination with federal, state and international partners, treasury’s housing Programs, regulation of national banks and 

thrifts, and various other initiatives, treasury made concerted efforts in fiscal year 2010 to restore economic growth and create jobs. 

a description of some of these initiatives can be found in the Management Discussion and analysis in Part I. summary descriptions 

of these programs and their performance follows. 

Key Performance Measure Table 

the following table contains only key performance measures associated with this outcome. actual and target trends represent four 

years of data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/ 

management/dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011 

Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Average days to close a FOIA case DO 67 64 95 51.6% 41.8% Unmet 80  

Changes that result from project engagement (Impact) DO 3.1 3.1 3 96.8% -3.2% Unmet 3.1  

Clean audit opinion on TARP financial statements DO 1 1 1 100.0% 0.0% Met 1  

Percentage of Congressional correspondence responses drafted 

within 48 hours (%) 

DO 87 90 97 107.8% 11.5% Exceeded 93  

Percentage of Customers Satisfied with FinancialStability.gov (%) DO 65 70 63 90.0% -3.1% Unmet 65  

Percentage of SIGTARP and GAO oversight recommendations 

responded to on time 

DO 100 100 93 93.0% -7.0% Unmet 100  

Scope and intensity of engagement (Traction) DO 3.7 3.6 3.5 97.2% -5.4% Unmet 3.6  

Percent of national banks with composite CAMELS rating of 1 or 

2 (%) 

OCC 82 90 70 77.8% -14.6% Unmet 90  

Percentage of national banks that are categorized as well 

capitalized (%) 

OCC 86 95 90 94.7% 4.7% Unmet 95  

Rehabilitated national banks as a percentage of problem national 

banks one year ago (CAMELS 3, 4 or 5) (%) 

OCC 29 40 23 57.5% -20.7% Unmet 40  

Total OCC costs relative to every $100,000 in bank assets 

regulated ($) 

OCC $8.81 $9.22 $9.28* 99.4% 5.3% Unmet $9.22  

Percent of safety and soundness exams started as scheduled (%) OTS 94 90 97 107.8% 3.2% Exceeded 90  

Percent of thrifts that are well capitalized (%) OTS 97 95 95 100.0% -2.1% Met 95  

Percent of thrifts with composite CAMELS ratings of 1 or 2 (%) OTS 84 80 77 96.3% -8.3% Unmet 80  

Total OTS costs relative to every $100,000 in savings association 

assets regulated ($) 

OTS $19.88 $22.00 $24.01 90.9% 20.8% Unmet $24.00  

*Estimated 

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

Legend Symbol 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

strategic goal: u.s. and world economies perform at full economic potential 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

87 

Analysis of Performance Results 

Performance results for this outcome generally reflect the 

challenges associated with the slow economic recovery and stillweakened financial system. the performance measures for these 

programs are to a significant degree outcome-oriented, and their 

results will improve as the economy grows and the impact of 

the Department’s programs mature. target trends were generally 

level with 2009 results. of the 11 measures that did not meet 

their targets, eight measures achieved 90 percent or higher of 

the target level. 

six new measures were baselined in fiscal year 2009 for ofs. 

the measures assess management of program operations and are 

intended to complement performance indicators used by the 

Department to track financial market conditions. In fiscal year 

2010, ofs exceeded targets for 17 percent of these measures, 

met targets for 50 percent, and did not meet targets for 33 

percent of measures. the widest gap between target and actual 

was for average days to process a foIa request, which was 95 

days rather than the target of 64. the result is associated with 

managing the most difficult legacy foIa requests as the majority 

of foIa cases on backlog were completed during the fiscal year. 

occ exceeded targets for 33 percent of its six measures and did 

not meet targets for 66 percent. ots exceeded targets for 40 

percent of its five measures, met targets for 20 percent, and did 

not meet targets for 40 percent. 

OFS Strategic and Operational Goals 

the purpose of eesa was to provide the secretary of the 

treasury with the authorities and facilities necessary to restore 

liquidity and stability to the u.s. financial system. In addition, 

the secretary was directed to ensure that such authorities were 

used in a manner that protects home values, college funds, 

retirement accounts, and life savings; preserves homeownership; 

promotes jobs and economic growth; maximizes overall returns 

to taxpayers; and provides public accountability. eesa also 

provided specific authority to take certain actions to prevent 

avoidable foreclosures. 

In light of this statutory direction, treasury established the 

following as its operational goals: 

1.	 ensure the overall stability and liquidity of the financial 

system 

a. Make capital available to viable institutions 

b. Provide targeted assistance as needed 

c. Increase liquidity and volume in securitization 

markets 

2.	 Prevent avoidable foreclosures and help preserve 


homeownership
 

3.	 Protect taxpayer interests 

4.	 Promote transparency 

1. Ensure the Overall Stability and Liquidity of the 

Financial System 

to ensure the overall stability and liquidity of the financial 

system, treasury developed several programs under tarP that 

were broadly available to financial institutions. under the 

capital Purchase Program (cPP), treasury provided capital 

infusions directly to banks and insurance companies deemed 

viable by their regulators but in need of a stronger asset base to 

weather the crisis. the capital assistance Program (caP) was 

developed to supplement the supervisory capital assessment 

Program (scaP), or “stress test” of the largest u.s. financial 

institutions. If these institutions were unable to raise adequate 

private funds to meet the scaP requirements, treasury stood 

ready to provide additional capital. 

In addition, treasury provided direct aid to certain financial 

industry participants through the targeted Investment Program 

(tIP), the asset guarantee Program (agP), and the aIg 

Investment Program. these programs were designed to mitigate 

the potential risks to the system as a whole from the difficulties 

facing these firms. 

similarly, the automotive Industry financing Program (aIfP) 

provided funding for general Motors corporation (gM) and 

chrysler llc (chrysler), as well as their financing affiliates, 

in order to prevent a significant disruption of the automotive 

industry that would have posed a systemic risk to financial markets and negatively affected economic growth and employment. 

treasury’s actions helped gM and chrysler undertake massive 

and orderly restructurings through the bankruptcy courts that 

have resulted in leaner and stronger companies. 

the Public-Private Investment Program (PPIP) was established 

to facilitate price discovery and liquidity in the markets for 

troubled real estate-related assets as well as the removal of such 

assets from the balance sheets of financial institutions. In addition to these initiatives, treasury implemented the consumer 

and business lending Initiative (cblI) to enhance liquidity 

and restore the flow of credit to consumers and small businesses. 

strategic objective: improved economic opportunity, mobility and security

with robust, real, sustainable economic growth at home and abroad 

part 2: annual performance report
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88 

treasury developed programs to revitalize asset-backed securities 

markets critical to restoring the flow of credit to consumers and 

small businesses. cblI is composed of the term asset-backed 

securities loan facility, the sba 7a securities Purchase 

Program, and the community Development capital Initiative. 

2. Prevent Avoidable Foreclosures and Help Preserve 

Homeownership 

to prevent avoidable foreclosures and preserve homeownership, treasury launched the Making home affordable Program 

(Mha), which includes the home affordable Modification 

Program (haMP). after 18 months, more than 1.3 million 

homeowners participating in haMP have entered into trial 

modifications that reduced their mortgage payments to more 

affordable levels. this includes 619,000 homeowners with 

non-gse loans. nearly 500,000 homeowners participating in 

the haMP Program have had their mortgage terms modified 

permanently, with over 220,000 of those participants in nongse loans that would be funded by the Department. haMP 

participants (both gse and non-gse loans) collectively have 

experienced a 36 percent median reduction in their mortgage 

payments—more than $500 per month—amounting to a total, 

program-wide anticipated savings for homeowners of more than 

$3.2 billion. Mha has also spurred the mortgage industry to 

adopt similar programs that have helped millions more at no 

cost to the taxpayer. 

In addition, treasury launched the housing finance agency 

(hfa) Innovation fund for the hardest hit housing Markets 

(hfa hardest hit fund, or hhf) to help state housing 

finance agencies provide additional relief to homeowners in the 

states hit hardest by unemployment and house price declines, 

and treasury and the Department of housing and urban 

Development (huD) enhanced the fha refinance Program 

by creating the fha short refinance option to enable more 

homeowners whose mortgages exceed the value of their homes 

to refinance into more affordable mortgages if their lenders agree 

to reduce principal by at least ten percent. 

3. Protect Taxpayer Interests 

federal government financial programs, including tarP, helped 

prevent the u.s. financial system from collapse, which could 

have resulted in a much more severe contraction in employment 

and production. the manner in which tarP was implemented 

is also designed to protect taxpayers and to compensate them for 

risk. for example, in exchange for capital injections, recipients of tarP funds have to adhere to corporate governance 

standards, limit executive pay, and provide additional reporting 

on lending activity. In addition, treasury generally received 

preferred equity, which provides dividends. the dividend rates 

increase over time to encourage repayment. 

further, eesa stipulated that the taxpayer benefit as the 

institutions which received tarP funds recovered. In connection with most investments, treasury also receives warrants 

for additional securities in the institutions. under the broad 

programs described above, the treasury has priority over existing 

shareholders of tarP recipients for which tarP holds equity 

investments. this gives taxpayers the ability to share in the 

potential upside along with existing shareholders. 

finally, treasury seeks to achieve the goal of protecting the 

taxpayer through the effective management and disposition of 

all tarP investments. 

4. Promote Transparency 

eesa requires transparency and accountability. specifically, 

eesa requires treasury to provide congress with a variety 

of reports. these include a monthly report to congress on 

tarP activity, and transaction reports posted within two days 

detailing every tarP transaction. In carrying out its operations, 

treasury has sought to not only meet the statutory requirements 

but also to be creative and flexible with respect to additional 

transparency initiatives. treasury proactively provides to the 

public monthly “Dividends and Interest reports” reflecting 

dividends and interest paid to treasury from tarP investments, 

loans, and asset guarantees, as well as monthly reports detailing 

the lending activity of participants in the cPP. 

eesa also provided for extensive oversight of the tarP, 

including by the congressional oversight Panel, the special 

Inspector general for the tarP, the financial stability 

oversight board (fsob), and the gao. In addition, treasury 

officials frequently testify before congress on the progress 

of tarP programs, and treasury staff provide briefings to 

congressional staff on programmatic developments. 

strategic goal: u.s. and world economies perform at full economic potential 

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performance and accountability report | fiscal year 2010 

89 

Troubled Asset Relief Program and the Office of Financial Stability 

Table 1: TARP Summary1 

From TARP Inception through September 30, 2010 

Dollars in billions 

Purchase Price or 

Guarantee Amounts 

Total $ 

Disbursed 

Investment 

Repayments 

Outstanding 

Balance2 

Received from 

Investments 

Capital Purchase Program3 204.9 204.9 152.54 49.8 19.8 

Targeted Investment Program 40.0 40.0 40.0 0.0 4.2 

Asset Guarantee Program 5.0 0.0 0.0 0.0 0.7 

American International Group Investment Program5 69.8 47.6 0.0 47.6 0.0 

Consumer and Business Lending Initiative 5.3 0.94 — 0.9 — 

Public Private Investment Program 22.4 14.1 0.4 13.7 0.2 

Automotive Industry Financing Program 81.8 79.7 11.2 67.2 2.9 

Treasury Housing Programs Under TARP 45.6 0.5 N/A N/A N/A 

Totals 474.8 387.7 204.1 179.2 27.8 

1 / This table shows the TARP activity for the period from inception through September 30, 2010, on a cash basis. Received from investments includes dividends and interest income reported in the 

Statement of Net Cost, and Proceeds from sale and repurchases of assets in excess of costs. 

2 / Total disbursements less repayments do not equal the outstanding balance. Other transactions affecting the outstanding balance include Treasury housing program funding of $0.5 billion as 

repayments are not required (or expected). Also, the outstanding balance is affected by certain non-cash items including capitalized interest of $0.3 billion, write-offs totaling $3.9 billion, and 

losses on two preferred stock transactions of $0.2 billion. 

3 / Treasury received $16.1 billion in proceeds from sales of Citigroup common stock, of which $13.1 billion is included at cost in investment repayments, and $3.0 billion of net proceeds in excess of 

cost is included in Received from Investments. 

4 / Includes Community Development Capital Initiative exchange from CPP of $363 million. 

5 / The disbursed amount is lower than purchase price because of the $29.8 billion facility available to AIG. During the periods ended September 30, 2010 and September 30, 2009, AIG drew $4.3 

billion and $3.2 billion respectively from the facility, leaving an undrawn amount of $22.3 billion under this facility. 

Total Dollars 

Disbursed by 

TARP 

(in Billions) 

$204.9 

Capital 

Purchase 

Program 

$0.5 Treasury Housing 

Programs Under TARP 

$40.0 Targeted 

Investment Program 

$0.0 Asset 

Guarantee Program 

$47.6 American 

International Group 

Investment Program 

$0.9 Consumer 

and Business 

Lending Initiative 

$14.1 Public Private 

Investment Program 

$79.7 Automotive 

Industry Financing 

Program 

TARP 

Investment 

Repayments 

and Other 

Amounts 

Received from 

Investments 

(in Billions) 

$172.3 

Capital 

Purchase 

Program 

$44.2 Targeted 

Investment 

Program 

$0.7 Asset 

Guarantee Program 

$0.6 Public Private 

Investment Program $14.1 Automotive 

Industry Financing 

Program 

additional information on the tarP program is available in 

the Two-Year Retrospective Report on the Troubled Asset Relief 

Program and ofs Fiscal Year 2010 Agency Financial Report, 

which can be found at www.FinancialStability.gov. 

Regulation of Banks and Thrifts 

occ and ots are the primary regulators of national banks and 

thrifts, respectively. occ and ots work to streamline their 

licensing and supervisory procedures and to keep regulations 

current, clearly written, and supportive of an effective process 

that promotes competitive financial services, consistent with 

safety and soundness. fiscal year 2010 activity focused on monitoring and responding to adverse conditions in the credit and 

financial markets, credit risk management, and national banks’ 

and thrifts’ loan portfolios. the Dodd-frank act calls for many 

of the duties of ots to be transferred to occ in July 2011, and 

for ots to be abolished. 

as the regulator of national banks, the occ has established 

four strategic goals that help support a strong economy for the 

american public: 1) a safe and sound national banking system; 

2) fair access to financial services and fair treatment of bank customers; 3) a flexible legal and regulatory framework that enables 

the national banking system to provide a full competitive array 

of financial services; and 4) an expert, highly motivated, and 

diverse workforce that makes effective use of occ resources. 

to achieve the goals and objectives outlined in its strategic 

strategic objective: improved economic opportunity, mobility and security

with robust, real, sustainable economic growth at home and abroad 

part 2: annual performance report
the department of the treasury 

90 

plan, the occ organizes its activities under three programs: 

supervise, regulate, and charter. 

as the supervisor of national banks, the occ has various ways 

to influence the national banking system: policy guidance and 

regulations that set forth standards for sound banking practices; 

on-site examinations and ongoing off-site monitoring that 

enable occ to assess compliance with those standards and to 

identify emerging risks or trends; and a variety of supervisory 

and enforcement tools—ranging from matters requiring boards’ 

and managements’ attention to informal and formal enforcement actions—that are used to obtain corrective action to 

remedy weaknesses, deficiencies, or violations. 

as of June 30, 2010, occ supervised 1,497 institutions with 

national bank charters and 51 federal branches, with assets 

totaling approximately $8.5 trillion. ninety-one percent of 

national banks were classified as well capitalized. ots supervised 753 private sector thrifts with assets of $931.2 billion. 

In addition, ots supervised 441 holding company enterprises 

with approximately $4.1 trillion in u.s. domiciled consolidated 

assets. these enterprises owned 402 thrifts with total assets 

of $714 billion, or 77 percent of total thrift industry assets. a 

majority of thrifts, 95 percent, were classified as well-capitalized. 

occ’s supervision ensures that the national banking system 

operates in a safe and sound manner while complying with consumer protection laws and regulations. as of september 30, 2010, 

70 percent of national banks earned composite ratings of either 

1 or 2 under the standard method of evaluating a bank’s operations, to include capital adequacy, asset quality, Management, 

earnings, liquidity, and sensitivity to market risk (caMels). 

the occ’s early identification and intervention with problem 

banks can lead to successful remediation of these banks. 

the measure “total occ costs relative to every $100,000 in 

bank assets regulated” gauges the efficiency of occ operations in meeting the supervisory demands of a growing, more 

complex national banking system. the measure supports the 

occ’s strategic goal of efficient use of agency resources. occ’s 

fiscal year 2010 cost relative to every $100,000 regulated was 

$9.28, while the target was $9.22. In fiscal year 2010, the occ 

conducted a survey of national banks to assess the effectiveness of its supervisory policies. over 75 percent of those who 

responded reported receiving the right amount of information 

for all subject areas. bankers were also generally pleased with 

the overall quality of bulletins and handbooks. 

ots gauges efficiency through the measures “Percent of safety 

and soundness exams started as scheduled” and “total ots 

costs relative to every $100,000 in savings association assets 

regulated.” In fiscal year 2010, targeted costs for regulating 

$100,000 in assets were $22.00, while actual costs were higher at 

$24.01. these costs are 21 percent higher than fiscal year 2009, 

largely due to the failure or merger of a number of larger thrifts. 

ninety-seven percent of safety and soundness exams were 

started as scheduled in fiscal year 2010. this is an improvement 

over 94 percent in 2009 and surpasses the target of 90 percent. 

Promoting Credit Availability to Creditworthy 

Borrowers 

throughout the economic turmoil, the occ has encouraged 

national banks to work constructively with borrowers who may 

be facing financial difficulty and to extend credit in a responsible and prudent manner. ensuring that credit is extended in a 

responsible manner is especially important to the restoration of 

a healthy financial sector and strong economy. 

•	 Small Business Lending: to help promote increased small 

business lending, the occ and other federal banking 

agencies partnered with the small business administration 

(sba) and held seminars for bankers on small business 

lending issues and the sba’s loan programs. In february 

2010, the occ and other banking agencies issued an interagency statement on meeting the credit needs of creditworthy small business borrowers. the statement reiterates the 

agencies’ policy that financial institutions that engage in 

prudent small business lending after performing a comprehensive review of a borrower’s financial condition will not 

be subject to criticism for loans made on that basis. 

to improve the agencies’ ability to monitor the credit 

available to households and businesses, the occ and 

other federal banking agencies made several changes to 

the information that banks and thrifts must report in their 

consolidated reports of condition and Income (call 

reports) and thrift financial reports (tfr). effective with 

their March 2010 filings, institutions have begun reporting 

small business loan data on a quarterly rather than annual 

basis. Institutions with $300 million or more in total assets 

or unused credit card commitments will also provide separately the amount of unused credit card lines for consumers 

and for other credit card borrowers. additional breakdowns 

of other unused loan commitments will also be gathered. 

strategic goal: u.s. and world economies perform at full economic potential 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

91 

this information will allow the agencies to better monitor 

credit flows throughout a business cycle. 

•	 residential Mortgage Modifications and commercial real 

estate (cre) loan Work-outs: the occ has also worked 

closely with treasury on its various mortgage modification 

programs and efforts to help homeowners facing financial 

difficulty. the occ has provided technical assistance on 

program design and implementation and has encouraged national banks to participate in those programs. In early 2009, 

congress adopted the Helping Families Save Their Homes Act 

of 2009. section 104 of this act requires the occ and ots 

to submit the Mortgage Metrics report to congress on a 

quarterly basis and specifically requires the number of mortgage modifications made that resulted in lower payments and 

the number of modified mortgage that re-defaulted. 

In response to the growing number of residential mortgage 

modifications and cre work-outs, in fiscal year 2010 the 

occ provided additional supervisory guidance on accounting and classification issues associated with such activities. 

the occ supervisory guidance to examiners on residential 

mortgage modifications stressed that the occ expects 

mortgage modifications to be undertaken in a manner 

that improves the likelihood that borrowers can repay the 

restructured credit under modified terms and in accordance with a reasonable repayment schedule. In october 

2009, the occ and other banking agencies issued a joint 

policy statement on prudent cre workout programs. the 

statement is intended to promote supervisory consistency, 

enhance the transparency of cre workout transactions, 

and ensure that supervisory policies and actions do not inadvertently curtail the availability of credit to creditworthy 

borrowers. the statement includes a variety of examples to 

illustrate how examiners will apply the principles outlined 

in the guidance. the agencies hosted a seminar for the 

banking industry on the guidance in December 2009. 

Bank Secrecy Act/Anti-Money Laundering 

(BSA/AML) 

through on-site examination activities, the occ and ots 

examiners evaluate banks’ and thrifts’ compliance with bsa/ 

aMl requirements and, where weaknesses are noted, seek 

corrective action. the occ has also developed a Money 

laundering risk system that provides community banks with 

succinct bsa/aMl risk assessment information to enhance the 

effectiveness of bsa/aMl supervision. the occ, the ots, 

and other federal financial Institutions examination council 

(ffIec) member agencies issued a revised ffIec bsa/aMl 

examination manual in april 2010 to incorporate regulatory 

changes and new supervisory guidance. In March 2010, the 

occ and the ots, along with the other federal banking 

agencies, fincen, sec, and commodity futures trading 

commission (cftc) issued interagency guidance on obtaining 

and retaining beneficial ownership information. the guidance 

clarifies and consolidates existing regulatory expectations for 

financial institutions obtaining beneficial ownership information for certain accounts and customer relationships. 

Fair Access to Financial Services and Fair 

Treatment of Bank Customers 

the occ fulfills its strategic goal of fair access to financial 

services and fair treatment of bank customers through its ongoing supervisory programs for national banks and their operating 

subsidiaries. these programs include ongoing supervisory 

examinations to ensure compliance with fair lending laws, the 

Community Reinvestment Act (cra), section 5 of the Federal 

Trade Commission Act (prohibiting unfair or deceptive acts 

and practices), and other consumer laws and regulations. In 

addition to supervisory activities, the occ issues guidance and 

handbooks, and offers training to bankers and bank directors 

to help them understand and meet their compliance and cra 

obligations. 

Fair Lending 

the occ’s and ots’s fair lending supervisory process is designed to assess and monitor the level of fair lending risk in every 

national bank and thrift. the occ and the ots assess compliance with fair lending laws and regulations; obtain corrective 

action when significant weaknesses or deficiencies are found in a 

bank’s policies, procedures, and controls relating to fair lending; 

and ensure enforcement action is taken when warranted. 

the occ and the ots responded to the mortgage crisis by 

encouraging national banks and thrifts to work with consumers, 

supporting private and public sector initiatives and programs 

that seek to assist these borrowers, and collecting and analyzing 

extensive mortgage lending and workout data from the largest 

national banks and thrifts. In January 2010, the occ updated 

its fair lending examination handbook to more effectively address disparate treatment in loan pricing, broker activity redlining, and steering borrowers to higher cost loans. these updates 

were coordinated with the other federal banking agencies. 

strategic objective: improved economic opportunity, mobility and security

with robust, real, sustainable economic growth at home and abroad 

part 2: annual performance report
the department of the treasury 

92 

Community Development 

the occ actively supports the efforts of national banks to 

engage in sound and successful community development activities and processes community development investment notices 

and proposals under title 12, code of federal regulations Part 

24. the occ, the ots, and other federal banking agencies, 

were co-sponsors of the 2010 national Interagency community 

reinvestment conference. through the first half of fiscal year 

2010, national banks made $2.31 billion in Part 24 investments. 

the occ and the ots also conduct outreach with a variety 

of organizations, including advocacy groups, research organizations, community development practitioners, and community 

development membership organizations whose constituencies 

include or affect low- and moderate-income consumers, distressed communities, and small and minority-owned businesses. 

During fiscal year 2010, the occ identified and publicized 

strategies for stabilizing communities affected by foreclosure 

and resulting property vacancies and continued its support of 

financial literacy programs. the agency issued publications 

and partnered with the sba to promote bank involvement in 

economic stimulus and recovery measures. 

While maintaining its consumer help Web site, which was 

launched in 2007 (www.helpwithmybank.gov), the occ 

continued to seek ways to work with the other federal financial 

regulatory agencies to better assist consumers when they have 

questions or need help in resolving issues with their banks. 

Consumer Protection 

During fiscal year 2010, the occ and the ots continued their 

work with the other federal banking agencies to improve consumer protection. these efforts included an interagency initiative to design and test a more understandable financial privacy 

notice that is clear so that consumers can effectively exercise 

their preferences for information sharing. after conducting both 

quantitative and qualitative consumer research, the occ, the 

ots, and other federal agencies (including the cftc, ftc, 

and sec) finalized model privacy notice forms. In november 

2009, the forms were provided to the industry through amendments to the rules that implement the financial privacy requirements of the gramm-leach-bliley act. In april 2010, the eight 

federal regulators released an online form builder that financial 

institutions can download and use to develop and print customized versions of the model consumer privacy notice. 

In December 2009, the occ, the ots, and other federal banking agencies issued for public comment proposed supervisory 

guidance on managing consumer compliance and reputation 

issues involved with reverse mortgages. the guidance discusses 

legal questions raised by reverse mortgages and stresses the 

need to provide adequate information to consumers about these 

products, provide qualified independent counseling to consumers 

considering them, and avoid potential conflicts of interests. the 

guidance also addresses related policies, procedures, internal 

controls, and third party risk management. final guidance was issued in 2010. effective with the December 31, 2010, call report 

and tfr filings, financial institutions will be required to provide 

information on the volume of reverse mortgages that they hold 

or have originated and sold during the year and on the volume of 

referrals they made to other lenders for a fee for such products. 

the occ is leading the interagency effort and ots is participating along with other federal agencies in implementing the 

registration requirements of the Secure and Fair Enforcement for 

Mortgage Licensing Act of 2008 (s.a.f.e. act). In June 2009, 

the agencies issued a proposal that establishes the registration 

requirements for mortgage loan originators employed by agencyregulated institutions, as well as requirements for these institutions, including the adoption of policies and procedures to 

ensure compliance with the s.a.f.e. act and final rule. the law 

also requires these mortgage loan originators to obtain a unique 

identifier through the nationwide Mortgage licensing system 

and registry (registry) that will remain with that originator, 

regardless of changes in employment. When the system is fully 

operational, consumers will be able to use the unique identifiers 

to access employment and other background information of 

registered mortgage loan originators. the final rule was issued in 

July 2010. substantial progress also has been made in modifying 

the registry to accommodate the registration of employees of 

agency-regulated institutions. the registry is expected to be 

fully operational in January 2011. 

In april 2010, ots proposed supplemental overdraft 

guidance, and in May, 2010, issued examination procedures for 

reviewing unfair or deceptive acts or practices under the federal 

trade commission act. occ, ots and the other federal 

banking regulators issued revised examination procedures for 

regulations incorporating consumer protections for credit cards, 

gift cards, and electronic transaction overdrafts in the Credit 

Card Accountability, Responsibility and Disclosure Act of 2009. 

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part 2: annual performance report
performance and accountability report | fiscal year 2010 

93 

In addition to these interagency efforts, in fiscal year 2010 the 

occ issued guidance on consumer protection and safety and 

soundness issues associated with tax refund anticipation loans, 

guidance to national banks on complying with provisions of 

the new opt-in requirements relating to overdraft protection 

programs, and provisions of the credit carD act of 2009. 

the occ also worked with the other federal banking agencies 

to develop and issue examination procedures related to the 

unlawful Internet gambling enforcement act of 2006 and the 

Protecting tenants at foreclosure act of 2009. 

In 2010, the occ continued the quarterly public service 

advertisement program, started in 2006, to promote awareness 

of banking issues and policies that affect consumers. the agency 

released print articles and 30-second radio spots in english and 

spanish for use in local newspapers and radio stations. topics 

covered in 2010 included gift cards, tenants in foreclosure, 

overdraft protection and refund anticipation loans. the spots 

ran more than 6,500 times in 44 states. 

Enforcement 

as needed, the occ uses its enforcement authority to address 

safety and soundness violations and noncompliance with laws 

and regulations. through the first half of fiscal year 2010, the 

occ issued 207 enforcement actions against national banks 

and 82 against institution-affiliated parties. the occ assessed a 

$50 million civil money penalty against a national bank for violations of the bank secrecy act (bsa) as part of a coordinated 

action with the DoJ, financial crimes enforcement network 

(fincen), and other federal agencies. the bank also agreed to 

forfeit $110 million to the u.s. under a deferred prosecution 

agreement with the u.s. attorney’s office in the southern 

District of florida and the Department of Justice. 

the occ also entered into a formal agreement with a national 

bank to reimburse consumers harmed by the bank’s credit card 

account closing practices; agreed-upon reimbursement totaled 

$775,000. In another action, a national bank was directed to 

make $5.1 million in restitution to over 60,000 consumers 

adversely affected by its relationships with a third party payment 

processor. the bank also received a $100,000 civil money penalty. 

Contributions of the Office of Economic 

Policy 

economic Policy continued to support the secretary and other 

senior policy makers by providing technical analysis, economic 

forecasts, and policy guidance. the office routinely provided 

economic intelligence on current and prospective economic 

developments in the united states. throughout the fiscal year, 

staff monitored and analyzed a number of trends and economic 

developments, including the ongoing housing market correction, the pace of economic recovery, and developments in labor 

markets. economic Policy continued to carry out its traditional 

role in the preparation of the President’s budget and supported 

the secretary of the treasury in his roles as chairman and 

Managing trustee of the social security and Medicare boards of 

trustees. specific examples of contributions are listed below: 

•	 economic Policy continued to play a key role in the 

development and operations of the haMP component 

of the Making home affordable Initiative, which aims to 

provide relief to struggling homeowners and stabilize the 

housing market. 

•	 economic Policy conducted ongoing research on policies 

enacted to assist in the recovery of the economy. the 

research culminated in a series of reports to increase understanding of the impact of the policies and provide guidance 

on future policy development. topics covered include the 

cobra tax credit, the hIre act tax exemption, and 

build america bonds. 

•	 economic Policy has also been involved in the implementation of the affordable care act, specifically in providing 

analysis and recommendations for the regulations that are 

being issued. 

Conclusion 

treasury supported key legislation, the Dodd-frank act and the 

small business Jobs act, in its efforts to repair and reform the 

financial system and the economy. treasury made a substantial 

contribution towards stabilizing the housing market through 

haMP and treasury housing Programs; however, this critical 

sector of the economy remains fragile. Private capital has not 

yet returned to the market, and the gses and the government 

strategic objective: improved economic opportunity, mobility and security

with robust, real, sustainable economic growth at home and abroad 

part 2: annual performance report
the department of the treasury 

94 

continue to play an outsized, though necessary, role in ensuring the availability of mortgage credit. roughly 95 percent of 

all mortgages are currently financed through either the gses, 

ginnie Mae, the federal housing administration (fha), the 

Department of Veterans affairs (Va), or the Department of 

agriculture (usDa). 

treasury seeks to exit investments as soon as practicable to 

remove treasury as a shareholder, eliminate or reduce treasury 

exposure, return tarP funds to reduce the federal debt, and 

encourage private capital formation to replace federal government investment. the desire to achieve such objectives must 

be balanced against a variety of other objectives, including 

avoiding further financial market or economic disruption and 

the potentially negative impact to the issuer’s health or capital 

raising plans from treasury’s disposition. treasury must also 

consider the limited ability to sell an investment to a third 

party due to the absence of a trading market or lack of investor 

demand, and the possibility of achieving potentially higher 

returns through a later disposition. an issuer typically needs 

the approval of its primary federal regulator in order to repay 

treasury, and therefore regulatory approvals also affect how 

quickly an institution can repay. 

Moving Forward 

treasury’s implementation of key financial reforms and efforts to 

support economic recovery will continue into fiscal year 2011. 

Implementation of Dodd-frank act and small business Jobs 

act initiatives, continued implementation of recovery act 

programs, management of the wind-down of tarP, implementation of housing programs, and other efforts are essential to 

supporting the Department’s goal of restoring financial strength 

and long-term stability. 

In fiscal year 2011, treasury will play a key role in facilitating 

development of a new system for housing finance, while being 

careful to maintain relative stability in the housing market 

through this difficult time. a stable, well-functioning market 

should achieve the following objectives: 

•	 Widely available mortgage credit 

•	 housing affordability 

•	 consumer protection, including easy-to-understand 


mortgage products and honest practices
 

•	 financial stability, meaning that credit and interest rate 

risk are spread in an efficient and transparent manner that 

does not generate excess volatility 

•	 alignment of incentives of issuers, originators, brokers, 

ratings agencies and insurers for long-term viability rather 

than short term gains 

•	 avoidance of privatized gains funded by public losses 

•	 strong regulation to ensure capital adequacy throughout 

the mortgage finance chain, enforce strict underwriting 

standards and protect borrowers from unfair, abusive or 

deceptive practices 

•	 standardization of mortgage products 

•	 support for affordable single and multifamily housing 

•	 Diversified investor base and sources of funding 

•	 accurate and transparent pricing 

•	 secondary market liquidity 

•	 clear goals and objectives for institutions that have 


government support, charters, or mandates 


In addition, in March 2010, the obama administration 

announced enhancements to an existing fha program that 

will permit lenders to provide additional refinancing options to 

homeowners who owe more than their homes are worth because 

of large declines in home prices in their local markets. this 

fha short refinance program will provide more opportunities 

for qualifying mortgage loans to be restructured and refinanced 

into fha-insured loans. tarP funds will be made available up 

to approximately $8 billion in the aggregate to provide additional coverage to lenders for a share of potential losses on these 

loans and to provide incentives to support the write-downs of 

second liens and encourage participation by servicers. 

treasury is also planning studies and program evaluations. In 

order to understand what drives mortgage defaults, treasury will 

link data on individual mortgages to administrative data on employment status and individual borrowers from credit bureaus. a 

more thorough understanding of what drives mortgage performance could expand the options available to the government 

to manage its exposure to mortgage risk, address the problem of 

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part 2: annual performance report
performance and accountability report | fiscal year 2010 

95 

legacy assets in the financial system, and contribute to effective 

housing policies that strengthen the market. 

treasury will also ensure that ots authorities, duties, employees, and property are transferred in an orderly fashion to 

occ, federal reserve, and fDIc. occ’s priorities for fiscal 

years 2011-2012 will focus on strengthening the resiliency 

of the national banking system through our supervisory and 

regulatory programs and activities. other supervisory priorities 

include identifying and resolving potential problem banks at 

the earliest possible stage; encouraging national banks to meet 

the needs of credit worthy borrowers, including appropriate 

and effective residential mortgage modification programs; and 

ensuring that national banks comply with cra, the bsa/aMl, 

and usa PatrIot act requirements; and further enhancing 

supervisory analytical tools. Many national banks will continue 

to have substantial volumes of troubled loans. In addition, the 

occ expects the level of enforcement actions associated with 

problem banks and bank failures to continue through the next 

fiscal year. 

strategic objective: improved economic opportunity, mobility and security

with robust, real, sustainable economic growth at home and abroad 

part 2: annual performance report
the department of the treasury 

96 

DeCreaseD gap in glObal stanDarD Of living 

a decreased gap in the global standard of living, associated with improved economic conditions in emerging markets, improves 

economic opportunity for americans. for the two performance measures associated with decreasing the gap in the global standard 

of living, treasury exceeded the 2010 performance target for one and the other was baselined. this performance reflects an improvement from 2009, when one target was not met. 

Key Performance Measure Table 

the following table contains key performance measures associated with this outcome. actual and target trends represent four years of 

data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/management/ 

dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011 

Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Monitor quality and enhance effectiveness of International 

Monetary Fund (IMF) lending through review of IMF country 

programs (%) 

DO Baseline 97 100.0% NA Met 100 B B 

Percentage of Grant and Loan Proposals Containing Satisfactory 

Frameworks for Results Measurement (%) 

DO 94 90 92.5 102.8% -1.6% Exceeded 90  

Analysis of Performance Results 

Performance for programs seeking to decrease the gap in the 

global standard of living exceeded one target and met the 

other. the measure related to IMf program effectiveness was 

baselined, and the previous measure was discontinued. for 

“Percentage of grant and loan proposals containing satisfactory 

frameworks for results measurement,” the actual result exceeded 

the target but decreased from 2009 actuals. given that actual 

results have exceeded targets for this measure for the last four 

years, it may be worth revising the target upward in the future. 

International Financial Institution Support 

the treasury Department provided critical support for u.s. 

efforts to foster a strong and sustainable global economic 

recovery through g-20 actions. robust foreign growth, particularly robust foreign domestic demand growth, is extremely 

important to a vibrant u.s. economy and u.s. job creation. 

this is especially true at a time when americans are re-building 

their personal finances and saving more. recognizing the need 

for a balanced global economy in which foreign economies are 

more reliant on domestic sources of growth and u.s. growth 

is less skewed toward domestic demand, the u.s. proposed a 

framework for strong, sustainable, and balanced growth, 

which was adopted at the Pittsburgh summit by g-20 leaders. 

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

the framework is essentially a commitment by the world’s leading economies to monitor current and prospective economic 

developments and cooperate on implementing globally consistent policies. achievements in the first year have focused on 

establishing five-year baseline forecasts for growth, demand, and 

the evolution of external balances and on developing baskets 

of policies that potentially could improve outcomes relative to 

the baseline. the key u.s. objectives within the g-20 macroeconomic dialogue are to ensure a strong recovery, create jobs, 

reduce unemployment, and foster durable, long-term growth 

through a more balanced global economy. 

the treasury Department continued to play a central role in 

efforts to build a stronger and safer global financial system. 

through the g-20 process, the financial stability board, and 

engagement with international standard setting bodies, treasury 

strategic goal: u.s. and world economies perform at full economic potential 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

97 

led efforts to ensure that reforms in the international financial 

system matched domestic regulatory reform initiatives. this will 

ensure that banks here and in foreign countries comply with 

high standards and are prevented from a “race to the bottom.” 

In fiscal year 2010, the treasury Department strongly supported 

international efforts to strengthen bank capital standards. these 

standards will require banks to hold enough capital so they can 

withstand losses similar to those sustained in the depths of the 

recession without turning to the taxpayer for help. banks will be 

required to hold significantly more capital against the types of 

risky trading-related assets and obligations that caused so much 

unexpected financial damage during the crisis. 

the treasury Department’s leadership in the International 

Monetary fund (IMf) helped advance u.s. priorities of 

modernizing the IMf’s governance structures to reflect global 

economic realities and enhancing the IMf’s lending toolkit 

for more effective crisis prevention and response. With strong 

support from the u.s., the IMf membership is working to 

achieve a five percent shift in IMf quota share from overrepresented countries to underrepresented, dynamic emerging market 

and developing countries. In fiscal year 2010, the treasury 

Department supported international efforts to strengthen the 

global financial safety net through enhancements to the IMf’s 

flexible credit line for the strongest performing members and 

the creation of a Precautionary credit line for emerging market 

members with sound policies and need for contingent financing 

to maintain market confidence. 

Provided financial and logistic support 

for Haiti earthquake relief 

Immediately following the January 12 earthquake, treasury 

officials facilitated the delivery of roughly $2 million in cash 

to a major haitian microfinance institution to help survivors 

access savings and remittances, even while domestic banks 

remained closed. treasury deployed a senior advisor within 

two weeks of the earthquake to assist in reconstructing the tax 

system database, recovering and protecting two hundred years’ 

worth of land titles and official records of all bank loans, and 

participated in the post-disaster needs assessment team which 

supported the haitian government’s presentation of a credible 

needs estimate to international donors in March. furthermore, 

treasury personnel led the global initiative to relieve haiti’s 

debt to the international financial institutions and worked 

extensively to help secure funding from congress for a u.s. 

contribution of up to $120 million in reconstruction aid for 

the multi-donor haitian reconstruction fund (hrf). at the 

request of the government of haiti, treasury played an integral 

role in designing and negotiating a partial credit guarantee fund 

to assist banks in restructuring loans and extending new credit 

to small and medium-sized enterprises (sMes) and credit cooperatives. the credit guarantee fund was subsequently supported 

by funding from the hrf trust fund, the World bank, and the 

Inter-american Development bank (IDb). 

Expanded access to financial services for 

consumers and small and medium-sized 

enterprises 

treasury worked with fellow g-20 co-chairs canada and 

korea to create and lead the g-20 financial Inclusion experts 

group. the group worked in two tracks dedicated to expanding 

financial services for consumers and sMes. the first track of 

experts surveyed best practices among national regulators and 

international standards-setting bodies to develop a list of policy 

principles to support expanding innovative approaches to financial service delivery and an action plan for implementing these 

principles around the world. the second track launched the 

sMe finance challenge, in which g-20 leaders called on the 

private sector to provide innovative ideas for public initiatives 

to marshal private financing for sMes, and on international financial institutions (IfIs) to support the winning entries. sMes 

are key to economic growth and job creation, and the sMe 

finance challenge will award effective and innovative ideas for 

financing sMes with the resources to scale up implementation. 

connecting poor households and businesses to resources for savings, credit, and insurance enables them to harness the power of 

entrepreneurship and create more stable, successful livelihoods. 

Conclusion 

In the wake of the financial crisis, the IfIs provided expanded 

lending facilities and economic advice to merger countries, 

which helped foster global recovery. While the work done by 

these institutions has been instrumental in helping to rebuild 

the global economy, the two measures associated with this outcome do not adequately capture that work. going forward, the 

Department will work to create measures that not only capture 

workload but also focus on broader outcomes that allow for the 

effective assessment of u.s. investments in these institutions. 

strategic objective: improved economic opportunity, mobility and security

with robust, real, sustainable economic growth at home and abroad 

part 2: annual performance report
the department of the treasury 

98 

Moving Forward 

restoring normal growth in emerging markets will require 

increased commitments from global governments to provide 

funding that is currently unavailable from private markets. 

having responded to the needs of borrowers in the wake of the 

financial crisis, the next step will be to ensure that the IfIs are 

adequately capitalized to meet the needs of members as their 

economies recover. further, the Department will continue to 

push for reform at these institutions, leveraging u.s. commitments to secure greater performance and results management. 

strategic goal: u.s. and world economies perform at full economic potential 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

99 

strategic objective: 

trust and confidence in u.s. currency Worldwide 

Budget Trend 

Trust and 

Confidence in 

U.S. Currency 

Worldwide 

Fiscal Year 

continued trust and confidence in the integrity of united states 

currency and its acceptance as a secure medium of exchange 

in business transactions enables the free flow of domestic and 

global commerce and contributes to the security and stability 

of the world’s monetary system. Worldwide circulation of u.s. 

currency notes is estimated to exceed $830 billion in value. as 

much as two-thirds of that circulates outside the borders of the 

united states. to instill a high degree of trust and confidence 

in the integrity of u.s. currency, the Department’s currency 

products are designed to achieve the maximum possible levels 

of deterrence against counterfeiting, product quality, user 

acceptance, and cost-effectiveness. to achieve these levels, 

the bureau of engraving and Printing (beP) and the united 

states Mint manufacture and deliver high-quality u.s. currency 

notes and coins to the united states federal reserve. the beP 

also produces security documents for federal agencies, and the 

united states Mint also produces and sells investment-grade 

precious metal bullion coins as well as high-quality numismatic 

coin products to the public. In addition to producing coins, 

the united states Mint also secures the nation’s precious metal 

reserves. 

the bureaus and policy offices responsible for the achievement 

of this objective are: 

•	 the bureau of engraving and Printing (beP) 

•	 the united states Mint 

•	 the office of the treasurer of the united states 

Performance targets associated with this objective did not 

change from 2009 to 2010. 

$4,500,000

$1,459,176$1,506,143$2,012,017$2,370,208$2,706,326$2,686,145$4,301,571 

2004 2005 2006 2007 2008 2009 2010 

$4,000,000

Dollars (in Thousands) Dollars (in Thousands) 

$3,500,000

$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

$500,000

$0

Performance 

Cost Trend 

Trust and 

Confidence in 

U.S. Currency 

Worldwide 

$500,000

$0

$4,500,000

$1,579,915$1,541,046$2,099,429$2,139,937$2,552,998$2,929,234$4,134,741 

2004 2005 2006 2007 2008 2009 2010 

$4,000,000

$3,500,000

$3,000,000

$2,500,000

$2,000,000

$1,500,000

$1,000,000

Fiscal Year 

Performance Cost 

by Outcome 

Trust and 

Confidence in 

U.S. Currency 

Worldwide 

100% Commerce 

enabled through

safe secure U.S. 

notes and coins 

strategic objective: trust and confidence in u.s. currency worldwide 

part 2: annual performance report
the department of the treasury 

100 

COmmerCe enableD thrOugh safe, seCure u.s. nOtes anD COins 

the performance measure results for this program were significantly impacted by two global economic trends: the slow economic recovery and increase in commodity costs. large swings in currency note and coin orders increased production costs, metal prices pushed 

down seigniorage rates, and the slow economic recovery led to a smaller customer base for numismatic coins. even with these trends, 

treasury still managed to come within 10 percent of its targets for the majority of measures for which it did not meet its targets. 

Key Performance Measure Table 

the following table contains key performance measures associated with this outcome. actual and target trends represent four years of 

data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/management/ 

dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011 

Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Currency shipment discrepancies per million notes (%) BEP 0.00 0.01 0.00* 100.0% 0.00% Exceeded 0.01  

Manufacturing costs for currency (dollar costs per thousand 

notes produced) ($) 

BEP $32.77 $37.00 $44.85* 78.8% 36.9% Unmet $44.00  

Percent of currency notes delivered to the Federal Reserve 

that meet customer quality requirements (%) 

BEP 99.9 99.9 97.5* 97.6% -2.4% Unmet 99.9  

Circulating on-time delivery (%) Mint Baseline 99.8 100.0% NA Met 88 B B 

Customer Satisfaction Index - A measure of the satisfaction 

of customers with numismatic products (%) 

Mint 88.3 88 86.1 97.8% -2.5% Unmet 88  

Numismatic Customer Base Mint 1.06 0.9 0.798 88.7% -24.7% Unmet 1  

Safety Incident Recordable Rate Mint Baseline 2.29 100.0% NA Met 3.34 B B 

Seigniorage per Dollar Issued ($) Mint $0.55 $0.53 $0.49 92.5% -10.9% Unmet $0.41  

*Estimated 

Analysis of Performance Results 

In fiscal year 2010, eight measures were reported for this objective, two of which were new measures. of all eight measures, 

one measure (13 percent) exceeded the performance target. 

five measures (62 percent) did not meet targets. a baseline was 

being established for two measures (25 percent), which count 

as having met their target. eleven measures were discontinued 

during fiscal year 2010, and two measures were discontinued in 

fiscal year 2009. the search for new and more informative metrics to drive improved performance is a positive effort. however, 

a more stable way to measure success is needed. 

Bureau of Engraving and Printing 

In fiscal year 2010, beP delivered 6.4 billion currency notes to 

the federal reserve board. this is an increase of 200 million 

units (three percent) over the 6.2 billion notes delivered in 

2009. beP failed to meet the federal reserve’s quality standard 

due to a problem with the redesigned $100 note creasing during 

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

production. Productivity decreased in from 2009 to 2010 by 8.8 

percent largely as a result of high spoilage and slower operating 

speeds as production of the newly redesigned $100 currency 

note commenced. beP did not meet its performance target for 

“cost per 1,000 notes Produced” due to complexities encountered as production began on the new $100. beP’s manufacturing costs increased from $32.77 per thousand units in 2009 to 

$44.85 in 2010, a 37 percent increase. the jump in cost was 

largely driven by a marked increase in the cost of counterfeit 

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performance and accountability report | fiscal year 2010 

101 

deterrent features added to the paper beP uses to produce the 

new $100 note and problems encountered during production 

that significantly increased spoilage. another driver of the 

increase was a continued trend in the 2010 federal reserve’s 

currency order toward a proportionally greater amount of higher 

denomination notes, which are more costly to manufacture 

due to their enhanced counterfeit deterrent features. unlike 

the u.s. Mint, beP is fully-funded by the federal reserve, and 

any return made is paid by the federal reserve to the treasury 

general fund rather than by beP. 

the redesigned $100 note made its debut on april 21, 2010 

during a ceremony at the treasury. the redesign of the $100 

note marked the completion of a multi-year initiative to implement the most ambitious currency redesign in united states 

history. the innovative security features in the new note are 

the work of more than a decade of research and development 

to protect u.s. currency from counterfeiting. the new notes 

have enhanced overt counterfeit deterrent features including a 

“3-D security ribbon” with shifting images and a “bell in the 

Inkwell” that disappears and reappears when the note is tilted. 

the redesigned notes remain the same size and use the same 

portraits and historical images, which have been enhanced. the 

redesign includes an enlarged, high-contrast numeral to help 

the public, including persons with visual impairments, distinguish the denominations of notes. the unveiling of the new 

$100 note was the first step in a global public education program 

implemented by the Department of the treasury, the federal 

reserve, and the u.s. secret service to educate those who use 

the $100 note about its changes before it begins circulating. 

rapid improvements in reprographic technologies and computer-driven printing pose increasing challenges to counterfeit 

deterrence. beP continues to collaborate with other members 

of the advanced counterfeit Deterrent (acD) steering 

committee (which includes representatives from beP, the 

Department of the treasury, the u.s. secret service, and the 

federal reserve) to determine the effectiveness of counterfeit 

deterrent features and to evaluate possible future currency 

designs. the acD committee also monitors the reliability of 

the beP manufacturing process, the incorporation of new design 

features, and the effectiveness of those features during the 

course of daily cash transactions. 

beP efforts related to quality continued as measures of shipment 

accuracy met its targets and achieved less than 0.01 percent 

discrepancies in the currency shipment. In 2010, beP reported 

97.5 percent of the currency notes delivered to the federal 

reserve met the product quality requirements. as it has for the 

past eight years, in fiscal year 2010 beP maintained Iso 9001 

certification in its quality management system for currency 

production, indicating ongoing commitment to continuous 

process and quality improvement. In 2010, beP also continued 

efforts to maintain Iso 14001 certification in its commitment 

to high-quality environmental stewardship and management. 

following court decisions in 2007 and 2008, the Department 

was ordered to provide meaningful access to united states 

currency for blind and other visually impaired persons. this 

may require changes to u.s. currency (excluding the one-dollar 

note.) the court ordered such changes to be completed in 

connection with each denomination of currency, not later than 

the date when a redesign is next approved by the secretary of 

the treasury. the cost of implementing these changes will be 

incorporated into future currency redesign costs, and cannot be 

estimated at this time. 

United States Mint 

the economic environment during fiscal year 2010 significantly 

impacted the united states Mint’s financial results. economic 

uncertainty intensified demand for bullion products while 

reducing demand for circulating coinage and numismatic 

products. total revenue reached $3.89 billion in fiscal year 

2010, up 33 percent from total revenue of $2.91 billion in fiscal 

year 2009. record sales of bullion coins drove this revenue 

growth as both circulating and numismatic revenue declined 

from the prior fiscal year. since the united states Mint manages 

the bullion program to a nominal net margin, revenue growth 

did not generate higher earnings in fiscal year 2010. the united 

states Mint returned $388 million to the treasury general fund 

in fiscal year 2010, down from $475 million (18 percent) from 

fiscal year 2009. 

Weak economic conditions that reduced shipments and revenue 

in fiscal year 2009 continued through the first half of fiscal year 

2010. this reversed midway through the fiscal year as retail 

activity recovered and federal reserve coin inventory fell. 

overall, total circulating coins shipped to the federal reserve 

increased 4 percent to 5.4 billion pieces in fiscal year 2010 from 

5.207 billion pieces in fiscal year 2009. While the total volume 

of circulating coins shipped to the federal reserve grew slightly, 

the composition of shipments ordered by the federal reserve 

shifted toward lower denomination coins, reducing the total 

strategic objective: trust and confidence in u.s. currency worldwide 

part 2: annual performance report
the department of the treasury 

102 

dollar value of circulating shipments to the federal reserve 

by 20 percent to $618.2 million from $777.6 million last year. 

at the start of fiscal year 2010, the prospect of continued low 

coin demand prompted the united states Mint to extend 

cost-saving measures begun in 2009. the bureau opted not to 

renew appointments for temporary personnel and instituted an 

organization-wide hiring freeze. the united states Mint also 

suspended all non-essential capital investments in circulating 

operations to cut cash outflow during a time of reduced cash 

inflow. even with these measures, the costs of coin production 

continued to increase because of escalating metal market prices. 

base metal expenses and the mix of circulating coin denominations ordered by the federal reserve negatively affected total 

seigniorage and seigniorage per dollar issued. Market prices of 

copper, nickel, and zinc recovered from fiscal year 2009 lows and 

climbed back to pre-2009 levels. rising metal prices increased 

total and per-unit expenses for fabricated blanks and strip. as a 

result, seigniorage generated from circulating coinage operations 

declined 30 percent to $300.9 million in fiscal year 2010 from 

$427.8 million in fiscal year 2009. seigniorage per dollar issued 

declined to $0.49 in fiscal year 2010 from $0.55 (11 percent) 

in 2009. the per-unit cost for both one-cent and five-cent 

denominations remained above face value for the fifth consecutive fiscal year. 

Demand appeared to ease along with precious metal market 

prices in the second quarter, but as the year went on, rising 

global fears over european sovereign debt caused demand to 

rebound as spot prices for gold and silver soared during the third 

and fourth quarters. the united states Mint sold 35.8 million ounces of bullion coins in fiscal year 2010, up 8.2 million 

ounces (29.7 percent) from the previous total sales record of 

27.6 million in fiscal year 2009. the united states Mint sold 

this record volume to authorized purchasers at higher prices, 

reflecting the increased market value for gold and silver. the 

average spot price of gold and silver increased 29.2 percent 

and 40.1 percent, respectively, in fiscal year 2010 from fiscal 

year 2009. accordingly, total bullion revenue reached a record 

high of nearly $2.9 billion in fiscal year 2010, up by around 70 

percent from $1.7 billion in fiscal year 2009. net income from 

bullion sales increased 69 percent to $55.2 million in fiscal year 

2010 from $32.7 million in fiscal year 2009. the united states 

Mint expects demand for bullion coins to remain strong for 

a sustained period until economic conditions stabilize and investors are drawn toward alternative investments. 

fiscal year 2010 was a challenging year for the united states 

Mint’s numismatic product line. the united states Mint was 

unable to offer some key products because blanks were diverted 

to the bullion program in accordance with statutory mandates 

to fulfill bullion demand. this negatively affected numismatic 

sales and customer acquisition and retention. additionally, 

poor economic conditions may have suppressed some consumer 

spending on collectibles. Despite weakened demand, the 

composition of numismatic sales shifted toward high price and 

high margin products. While numismatic sales revenue fell six 

percent to $413.1 million from $440.1 million in 2009, numismatic net income increased nearly 21 percent to $49.8 million 

in fiscal year 2010 from $41.2 million last year. 

the united states Mint is responsible for protecting over $320 

billion in united states assets stored in its facilities. the Mint’s 

office of Protection (united states Mint Police) safeguards 

both Mint assets and non-Mint assets in its custody, including 

gold and silver bullion reserves, as well as the Mint’s products, 

employees, facilities, and equipment. 

Conclusion 

the beP faced challenges related to the release of the new $100 

note and related spoilage problems. the Mint faced challenges 

related to the price of base metals and the high demand for 

bullion products. the current suite of measures only partially 

gauges the success of the outcome and objective associated with 

coins and currency. Improved measures are needed to determine 

if commerce is effectively enabled for the nation. Proper demand management will minimize costs across the entire supply 

chain, including the costs of obsolescence and disposal. 

beP has engaged in an extensive effort to rapidly introduce 

counterfeit-deterrent currency note redesigns, a necessary step 

to address the increasing frequency of serious counterfeiting 

threats, and to bolster global trust and confidence in the integrity of u.s. currency as a medium of transactional exchange. the 

only indicator of success in this arena is the estimated counterfeiting rate. because it is an indicator, setting a target for this 

would be similar to setting a target for the unemployment rate 

– it is an important outcome, but it is extremely difficult to draw 

a direct correlation between it and the actions of the treasury 

Department. however, other measures could be considered such 

as the average cycle time and marginal costs to introduce note 

redesign. beP will introduce a new suite of performance metrics 

strategic goal: u.s. and world economies perform at full economic potential 

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performance and accountability report | fiscal year 2010 

103 

in fiscal year 2011 that will measure the bureau’s performance 

across a broader spectrum of operations. 

the u.s. Mint faced challenges related to the price of base metals and the high demand for bullion products. the u.s. Mint is 

working to explore options that might help reduce the cost of 

materials used in producing the nation’s coinage. the u.s. Mint 

baselined two new measures, discontinued four measures, and 

did not meet three measures. 

Moving Forward 

Bureau of Engraving and Printing 

to improve efficiency, beP is currently engaged in a multi-year 

project to retool its manufacturing processes to improve beP’s 

capabilities, increase its flexibility, and improve its response to 

product configuration changes. the project will include installation of new state-of-the-art equipment capable of producing 

50-note currency sheets, achieving significantly greater production efficiency than the existing equipment, which produces 

32-note sheets. the new equipment will include intaglio 

presses, electronic inspection systems, and finishing equipment. beP continues to invest in new technologies such as its 

beP enterprise (ben) manufacturing support system program 

(Mss), which will integrate, consolidate, and enable improved 

analysis of data from various disparate information technology 

systems, equipment, and software applications used at beP. 

When completed, this effort will optimize the reliability, integration, and timely collection of online real-time performance 

data. having this data on hand will enable program managers to 

proactively manage manufacturing overhead costs, production 

efficiency, and resource productivity. 

In keeping with the commitment by beP’s management to 

maintain high-quality environmental management, beP is 

investing in capital improvements that will enhance productivity and lessen the environmental impact of beP operations 

on air emissions, wastewater discharge, and solid waste. the 

most significant project will enable waste water recycling to 

reduce water usage by several million gallons per year. the 

project will also reduce the required quantity of chemicals the 

beP must use to make currency note wiping solution, which 

becomes wastewater. this project will both improve resource 

sustainability and reduce the cost and efficiency of currency 

note production. other projects either already underway or 

currently in the planning stages include improvements in 

energy efficiency through replacement or upgrade of older assets 

with more energy efficient and environmentally responsible 

assets; decreased energy usage and cost savings from increased 

data center efficiency and consolidation from increased server 

virtualization and from decreased energy usage and It operation 

costs; and savings from reduced material spoilage during the currency note production process, which should enable reductions 

in the quantity of currency paper and other materials purchased 

for use in manufacturing currency notes. 

other capital assets provide ongoing challenges for the bureau, 

however. the age of beP’s Washington, D.c. facility poses some 

infrastructure challenges. based on an earlier condition assessment, it was estimated that an investment of $250-$500 million 

would be needed to upgrade the main and annex buildings 

over the next 10 years. beP had been delaying infrastructure 

improvements pending the outcome of a feasibility study that 

was completed at the end of July 2010. at the end of fiscal year 

2010, the study was still under executive review but is expected 

to enable the beP and the Department of the treasury to 

strategically address facility issues going forward. 

United States Mint 

although the united states Mint has taken steps to reduce its 

manufacturing costs, base metal expenses continue to make 

up the greatest portion of the cost of circulating coin production. changing the composition of circulating coinage to less 

expensive alternative materials could generate significant cost 

savings and mitigate further reductions in seigniorage if market 

prices for copper, nickel, and zinc increase. base metal prices 

have trended upward during fiscal year 2010. the average daily 

spot price increased 57 percent for copper, 56 percent for nickel, 

and 52 percent for zinc between fiscal year 2009 and fiscal year 

2010. 

In fiscal year 2011, the united states Mint will remain focused 

on meeting demand for products as economic uncertainty 

continues. the united states Mint expects circulating volumes 

to increase from 2010. however, any volume increase will likely 

consist of lower denomination coins as federal reserve inventories of higher denominations remain sufficient to fulfill the 

majority of demand in upcoming years. bullion demand looks to 

remain strong until economic conditions stabilize and investors 

are drawn toward alternative investments. for numismatic 

products, the Mint will focus on improving customers’ experience by releasing core products earlier in the year and increasing 

the availability of precious metal products. 

strategic objective: trust and confidence in u.s. currency worldwide 

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104

strategic goal: 

PreVenteD terrorIsM anD ProMoteD the 

natIon’s securIty through strengtheneD 

InternatIonal fInancIal systeMs 

strategic objective: 

Pre-empted and neutralized threats to the international financial 

system and enhanced u.s. national security 

the office of terrorism and financial Intelligence (tfI) 

marshals the department’s intelligence and enforcement 

functions with the twin aims of safeguarding the financial 

system against illicit use and combating rogue nations, terrorist 

facilitators, weapons of mass destruction (WMD) proliferators, 

money launderers, drug kingpins, and other national security 

threats. the office works to keep u.s. and world financial 

systems accessible to legitimate users and to avoid exploitation 

of these systems by unlawful users. Its unique capabilities leverage intelligence, law enforcement, sanctions, regulatory, and 

diplomatic tools to achieve treasury’s strategic objective. this 

is accomplished through four tfI offices, a division within the 

Irs, and a bureau: 

•	 the office of foreign assets control (ofac) administers 

and enforces economic and trade sanctions 

•	 the office of terrorist financing and financial crimes 

(tffc) is the policy and outreach arm of tfI and provides 

expert analysis on terrorist financing, money laundering, 

financial crime, and sanctions issues 

•	 the office of Intelligence and analysis (oIa) provides 

all-source intelligence analysis, leads the Department’s 

integration into the larger intelligence community, and 

provides support to Department leadership on a full range 

of economic, political, and security issues 

Performance Cost 

by Outcome 

Pre-empted 

and Neutralized 

Threats to the 

International 

Financial 

System and 

Enhanced 

U.S. National 

Security 80.3% Removed or reduced threats to national security from 

terrorism, proliferation of weapons of mass destruction, narcotics 

trafficking and other criminal activity on the part of rogue regimes, 

individuals, and their financial and other support networks 

19.7% Safer and 

more transparent 

U.S. and 

international 

financial systems 

Fiscal Year 

Performance 

Cost Trend 

Pre-empted 

and Neutralized 

Threats to the 

International 

Financial 

System and 

Enhanced 

U.S. National 

Security 

$221,944$270,553$478,764$505,209$555,144$570,087$668,013 

2004 2005 2006 2007 2008 2009 2010 

Dollars (in Thousands)

Fiscal Year 

Budget Trend 

Pre-empted 

and Neutralized 

Threats to the 

International 

Financial 

System and 

Enhanced 

U.S. National 

Security

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$350,001$455,108$602,332$697,774$778,960$987,668$1,041,419 

2004 2005 2006 2007 2008 2009 2010 

$800,000

Dollars (in Thousands) 

$600,000

$400,000

$200,000

$0

strategic goal: prevented terrorism and promoted the nation’s security 

through strengthened international financial systems 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

105 

Performance measures associated with this objective had 35 

percent more aggressive targets compared to 2009. 

•	 the treasury executive office of asset forfeiture 

(teoaf) administers the treasury forfeiture fund, which 

is the receipt account for the deposit of non-tax forfeitures 

•	 the Irs criminal Investigations division (Irs-cI) investigates potential criminal violations of the Internal revenue 

code and related financial crimes 

•	 the financial crimes enforcement network (fincen) 

administers the bank secrecy act (bsa), supports law 

enforcement investigations and prosecutions, shares 

bsa information domestically and with foreign financial 

intelligence units, and enhances anti-money laundering 

and counter-terrorist financing efforts domestically and 

internationally 

the outcomes associated with this objective are: 

•	 removed or reduced threats to national security from terrorism, proliferation of weapons of mass destruction, drug 

trafficking and other criminal activity on the part of rogue 

regimes, individuals, and their support networks 

•	 safer and more transparent u.s. and international financial 

systems 

strategic objective: pre-empted and neutralized threats to the 

international financial system and enhanced u.s. national security 

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106 

remOveD Or reDuCeD threats tO natiOnal seCurity frOm terrOrism, 

prOliferatiOn Of WeapOns Of mass DestruCtiOn, Drug traffiCking anD 

Other Criminal aCtivity On the part Of rOgue regimes, inDiviDuals, 

anD their suppOrt netWOrks 

this outcome is linked to treasury’s impact in policy making, outreach, and diplomacy; the impact of economic sanctions; and the 

impact of intelligence information and analysis. treasury exceeded its targets in these focus areas. 

Key Performance Measure Table 

the following table contains only key performance measures associated with this outcome. actual and target trends represent four 

years of data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/ 

management/dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011 

Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Impact of TFI programs and activities DO 7.81 7.40 8.1 109.5% 3.7% Exceeded 7.6  

Percent of forfeited cash proceeds resulting from highimpact cases (%) Treasury 

Forfeiture Fund 

87.65 75 93.11 124.1% 6.2% Exceeded 80  

Analysis of Performance Results 

tfI uses a qualitative self-assessment of its four major areas 

of operations—policy, sanctions, intelligence, and moneylaundering—to measure its performance. the “Impact of tfI 

programs and activites” measure is a composite score, which is 

the average rating of four performance goals. each performance 

goal is linked to components within tfI and the Department’s 

strategic goals. In fiscal year 2010, this metric achieved a 8.1 

rating out of 10 possible points, exceeding the target and 

improving by 3.7 percent over the previous year. 

two tfI offices, ofac and tffc, share a combined performance goal, focusing on the impact of policy making, outreach 

and diplomacy and the impact of economic sanctions: 

•	 “tfI u.s. government effectively employed tools and authorities to further policy objectives and mitigate national 

security threats.” 

oIa has two separate performance goals that focus upon the 

impact of information, intelligence, and analysis on senior 

leadership and the intelligence community. 

•	 “support the formulation of treasury policy and the execution of departmental authorities through all-source analysis 

of the global financial network” 

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

•	 “Provide treasury Department decision makers with timely, 

accurate, and relevant intelligence support on the full 

range of economic, political, and security issues” 

user data surveys are conducted with financial intelligence users 

to gauge the impact and influence oIa has upon those which 

use its information. 

the final performance goal relates to fincen. 

•	 “anti-money laundering and combating financing of terrorism regulations are administered effectively and efficiently.” 

this performance measure performed at 8.1, high impact, in 

fiscal year 2010 and was baselined in fiscal year 2009 with a value 

of 7.8, or medium impact. the fiscal year 2010 target was 7.4 

and will be 7.6 in fiscal year 2011. the treasury forfeiture fund 

achieved 93.11 percent of forfeiture cash proceeds resulting from 

strategic goal: prevented terrorism and promoted the nation’s security 

through strengthened international financial systems 

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performance and accountability report | fiscal year 2010 

107 

high-impact cases, performing above both the fiscal year 2010 

target and 2009 actual. 

the following sections describe efforts undertaken by tfI in 

2010. these results are the basis for assessing tfI’s impact and 

are reflected in their performance results. 

Combated Iran’s Efforts to Acquire 

Proliferation-Related Materials 

In June 2010, the united nations (un) adopted united 

nations security council resolution (unscr) 1929, broadening the existing un sanctions framework. shortly thereafter, 

treasury announced new designations under eo 13382 targeting individuals and entities that facilitate Iranian proliferation 

activity. Most prominently, treasury designated Post bank, an 

Iranian state-owned bank for providing support to and acting 

on behalf of un designee bank sepah. When bank sepah, one 

of Iran’s largest state-owned banks, was sanctioned for financing 

proliferation, Iran began to use Post bank to facilitate international trade. treasury also designated five Islamic republic of 

Iran shipping lines (IrIsl) front companies and blocked 27 

vessels due to their connection to IrIsl. In august, treasury 

announced a set of designations targeting the government of 

Iran’s support for terrorism and terrorist organizations, including 

hizballah, hamas, Palestinian Islamic Jihad, the Popular front 

for the liberation of Palestine-general command, and the 

taliban. from June to august, treasury identified 43 entities 

in the banking, investment, mining, engineering, insurance, 

energy, petroleum, and petrochemical industries determined to 

be owned or controlled by the government of Iran pursuant to 

the Iranian transactions regulations (Itr). finally, treasury 

issued an advisory to financial institutions about the financial 

provisions in unscr 1929. 

the Comprehensive Iran Sanctions, Accountability and Divestment 

Act of 2010, signed by President obama in July, dramatically 

expands the tools available to the treasury Department to 

combat Iran’s efforts to acquire proliferation-related materials. 

In august, treasury published the Iranian financial sanctions 

regulations (Ifsr) as a framework for implementing subsections 104(c) and 104(d) of the act. under the Ifsr, the 

secretary of the treasury may prohibit or impose strict conditions on opening or maintaining accounts with foreign financial 

institutions that he finds knowingly engage in certain activities 

related to Iran. the Ifsr also prohibits any person owned 

or controlled by a u.s. financial institution from knowingly 

engaging in transactions with or benefiting Iran’s revolutionary 

guard corps or any of its agents or affiliates whose property is 

blocked under the International emergency economic Powers 

act. 

treasury officials have been actively engaging with our partners 

throughout the world to describe the u.s. government’s Iran 

sanctions programs and to encourage our partners to implement 

similar restrictions on Iran. as a result of this engagement, 

additional states have demonstrated to Iran the consequences 

of its failure to meet its international obligations. the european 

union (eu), australia, canada, norway, Japan, and south 

korea have implemented sanctions. these actions strengthen 

international resolve to prevent proliferation and Iran’s development of nuclear weapons and to press Iran to return to serious 

negotiations. 

the financial measures the u.s. and others are implementing are imposing serious costs and constraints on Iran. Iran is 

effectively unable to access financial services from reputable 

banks and is increasingly unable to conduct major transactions 

in dollars or euros. over the last several months alone, dozens of 

companies have announced publicly that they have curtailed or 

Treasury Outcomes Performance Goals Focus Areas 

Removed or reduced threats to national security 

from terrorism, proliferation of weapons of 

mass destruction, drug trafficking and other 

criminal activity on the part of rogue regimes, 

TFI effectively employed tools and authorities to further U.S. Government policy 

objectives and mitigate national security threats 

Impact of policy making, outreach, and 

diplomacy 

Impact of economic sanctions 

individuals, and their support networks Support the formulation of Treasury policy and the execution of departmental 

authorities through all-source analysis of the global financial network 

Impact of information and analysis 

Provide Treasury Department decision makers with timely, accurate, and relevant 

intelligence support on the full range of economic, political, and security issues 

Safer and more transparent U.S. and 

international financial systems 

Anti-money laundering and combating financing of terrorism regulations are 

administered effectively and efficiently 

Impact of activities to create safer and 

more transparent financial systems 

strategic objective: pre-empted and neutralized threats to the 

international financial system and enhanced u.s. national security 

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108 

eliminated their business ties to Iran. Iran is increasingly unable 

to secure needed foreign investment, financing, and technology 

to modernize its aging energy infrastructure, threatening its oil 

and gas production and export capacity. 

reports indicate that the regime is worried about the impact 

of these measures, especially on its banking system and on its 

prospects for economic growth. for instance, in september, 

former Iranian President rafsanjani publicly warned leaders 

in Iran to take the sanctions seriously. he said that, “We have 

never had such intensified sanctions and they are getting more 

intensified every day. Whenever we find a loophole, they [the 

Western powers] block it.” the strategy is creating leverage to 

enhance u.s. government diplomatic options. 

on september 29, 2010, President obama signed an executive 

order that imposes sanctions on Iranian officials determined 

to be responsible for or complicit in serious human rights 

violations. President obama identified eight individuals who 

share responsibility for the sustained and severe violation of 

human rights in Iran since the June 2009 disputed presidential 

election. as a result of this action, u.s. persons are prohibited 

from engaging in transactions with these individuals, and these 

individuals cannot access any property in the u.s. or in the 

possession or control of u.s. persons. 

Finalized Terrorist Finance Tracking 

Program Agreement 

treasury, in conjunction with the Departments of Justice 

and state, successfully led negotiations for a new terrorist 

finance tracking Program agreement (tftP) with the eu. 

the agreement was ratified by the european Parliament in 

July 2010. the new accord entered into force on august 1 and 

allows the treasury Department to subpoena financial payment 

messaging data stored in the eu for use in u.s. counterterrorism 

investigations. With the resumption of the full functioning of 

the tftP, the u.s. and the eu restored this highly valuable 

counterterrorism tool that has aided in the prevention of terrorist attacks and investigations. 

after the terrorist attacks on september 11, 2001, the 

Department of the treasury initiated the tftP to identify, 

track, and pursue terrorists and their networks. the treasury 

Department is uniquely positioned to track terrorist money 

flows and assist in u.s. government efforts to uncover terrorist 

cells and map terrorist networks. since the start of the program, 

the tftP has provided thousands of valuable leads to u.s. 

government agencies and other governments. 

Privacy protections in the program specify that the data in 

the tftP may only be searched in connection with a specific 

counterterrorism investigation and not for any other purpose. 

the tftP data can be searched only if an independent basis 

exists to believe that the subject of a search is connected 

to terrorism or its financing. this independent evidentiary 

predicate must be recorded before any search in the tftP 

data is conducted. to verify the tftP’s robust safeguards, an 

independent auditor reviews the program’s physical security, 

ensures proper procedures are implemented, and confirms that 

no data mining occurs. 

Targeted Threats to the International 

Financial System Through Financial 

Sanctions 

treasury seeks to ensure that the financial networks of terrorists, 

WMD proliferators, and other criminals are degraded in order to 

undermine their illegitimate activities. ofac continues to send 

the message that violations of u.s. economic sanctions will not 

be handled lightly. since January 2010, treasury has imposed 

penalties or entered into settlement agreements totaling 

over $200 million for alleged violations of the united states’ 

economic sanctions targeting Iran, sudan, cuba, burma, and 

designated narcotics traffickers. these penalties and settlements 

are from cases involving, among other things, the export of 

aircraft to Iran, the provision of shipping services to Iran and 

sudan, and the use of vessels owned or managed by the IrIsl. 

the figure also includes ofac’s most recent settlement with a 

major international bank, reached in conjunction with relevant 

state, federal, and international authorities, involving the 

manipulation of payment data which allowed sanctions targets 

to surreptitiously access the u.s. financial system for over two 

decades. the latest bank settlement brings the total amount in 

settlements for similar conduct to nearly $930 million. 

treasury designates foreign adversaries and networks of companies, other entities, and associated individuals pursuant to an 

eo or statute, and u.s. persons are prohibited from conducting 

transactions, providing services, and other associated dealings 

with those designated. the designations made this year varied 

across a range of sanctions programs and areas across the globe, 

including narcotics, WMD proliferation, terrorism, and the 

strategic goal: prevented terrorism and promoted the nation’s security 

through strengthened international financial systems 

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performance and accountability report | fiscal year 2010 

109 

Democratic republic of the congo. key activities in fiscal year 

2010 are described below. 

•	 treasury sustained a campaign of sanctions against Iran, 

its agents, and its front companies in response to Iran’s 

continued defiance of various unscr. ofac designated 

23 individuals and entities involved in Iran’s efforts to 

proliferate WMD under eo 13382; identified a subsidiary 

contributing to Iran’s proliferation efforts; identified 27 new 

vessels and updated entries of 71 vessels; designated nine 

entities and individuals involved in Iran’s support for terrorism under eo 13224; and identified 43 targets as acting 

for, acting on behalf of, being owned, or being controlled 

by the government of Iran. 

•	 treasury designated 21 individuals and entities pursuant to 

eo 13224 with respect to terrorism, including the July 16, 

2010 designation of anwar al-awlaki, a key leader for 

al-Qa'ida in the arabian Peninsula; a yemen-based terrorist 

group; and the July 22, 2010 designation of three key leaders and financiers for the taliban and its affiliated group, 

the haqqani network. 

•	 treasury continued to support Mexican counter narcotics 

law enforcement. In august, 2010, ofac Director adam 

szubin met with private and public sector officials in 

Mexico city to strengthen coordination and cooperation 

between treasury and Mexican actions against cartels. 

During the year, treasury has designated 49 individuals and 

25 entities associated with Mexican drug cartels, enhanced 

information exchange with the Mexican financial intelligence unit (fIu), and improved coordination on a variety 

of counter narcotics initiatives targeting the arellano felix 

organization, beltran leyva organization, and the sinaloa 

cartel. 

•	 treasury designated 37 individuals and 37 entities pursuant 

to the foreign narcotics kingpin Designation act, and 42 

individuals and 37 entities pursuant to eo 12978 targeting 

drug traffickers and their networks centered in colombia. 

•	 In april and June of 2010, treasury designated six militia 

leaders involved in atrocities in the Democratic republic of 

the congo. 

•	 In april 2010, the President issued an eo to address the 

conflict in somalia. shortly following the announcement, 

treasury implemented a new sanctions program based 

on that eo and designated 12 persons identified by the 

President as contributing to the somali conflict. 

Charitable Outreach 

outreach to the charitable sector represents a fundamental 

objective for treasury in its broader campaign to combat terrorist financing. treasury’s ongoing engagement with the charitable 

community strives to protect charities from terrorist abuse and 

empower the sector to adopt and implement effective safeguards 

against terrorist exploitation. treasury Department officials have 

continued their active engagement with donor communities 

and other components of the u.s. government to help promote 

safe and transparent charitable giving, while protecting against 

terrorist financing. 

this summer, the treasury Department published a factsheet 

entitled “Protecting charitable giving: frequently asked 

Questions.” this document provides substantial information 

about the treasury Department’s approach to combating terrorist abuse of charities and answers important questions raised by 

the charitable sector and the donor communities concerning 

charitable giving. the factsheet reflects significant dialogue 

with the charitable sector and also serves as a prime example of 

outreach to Muslim communities in the united states. 

Strengthened Intelligence to Counter 

Violent Extremism and Nuclear 

Proliferation 

this year, treasury strengthened its ability to shape intelligence 

analysis and drive collection on the global financial network. 

treasury has provided analysis of terrorist groups including 

al-Qa’ida and its affiliates, the taliban, hamas, and hizballah; 

WMD proliferation networks; violent extremism and corruption 

in afghanistan and Pakistan; Iraqi insurgency support networks; 

and nation-states that challenge u.s. interests, such as Iran and 

north korea. 

Countered Insurgency in Afghanistan 

treasury served a leading role in the establishment of the 

afghanistan threat finance cell (atfc) this year. the atfc 

is a kabul-based task force charged to enhance the collection, 

exploitation, analysis, and dissemination of intelligence to 

combat funding and support for the taliban and other terrorist 

and insurgent networks in afghanistan. the atfc provides 

threat finance expertise to u.s. civilian and military leaders and 

assists afghan authorities in their investigations into insurgent 

finance, narcotics trafficking, and government corruption. 

through this assistance, the atfc has helped to build the 

strategic objective: pre-empted and neutralized threats to the 

international financial system and enhanced u.s. national security 

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110 

capacity of afghan authorities to operate independently, a key 

u.s. policy goal in afghanistan. 

Targeted Organized Crime in Mexico 

over the past year and in close collaboration with Mexican 

counterparts, treasury increased efforts to combat money 

laundering and target the financial underpinnings of criminal 

organizations in Mexico. treasury ramped up its technical 

assistance program in Mexico to address key money laundering 

vulnerabilities through courses on forensic accounting, financial 

investigations, and financial sector supervision. 

Prevented North Korean Proliferation and 

Other Illicit Activities 

the u.s. government has longstanding concerns regarding north korea’s involvement in a range of illicit activities 

conducted through government agencies and associated 

front companies. In august 2010, President obama issued an 

eo freezing the assets of certain persons with respect to the 

Democratic People’s republic of korea (north korea). this 

new eo expands the scope of the national emergency declared 

in eo 13466 of June 26, 2008 and targets north korean arms 

trafficking, luxury goods procurement, and illicit economic 

activities. the eo directs the secretary of the treasury, in 

consultation with the secretary of state, to target for sanctions 

individuals and entities facilitating north korean trafficking 

in arms and related materiel; procurement of luxury goods; 

and engagement in illicit economic activities, such as money 

laundering, the counterfeiting of goods and currency, bulk cash 

smuggling, and narcotics trafficking. 

Major Asset Seizures and Forfeitures 

teoaf’s mission is to affirmatively influence the consistent 

and strategic use of asset forfeiture by law enforcement bureaus 

from the Department of the treasury and Justice to disrupt and 

dismantle criminal enterprises. the treasury forfeiture fund 

had a uniquely robust year with over $1 billion in forfeitures 

and recoveries, including $134 million in the credit suisse case. 

Irs-cI and the federal bureau of Investigations jointly investigated the abn-aMro bank case. In May 2010, the former 

abn-aMro bank n.V., now named royal bank of scotland 

n.V., agreed to forfeit $500 million to the united states in 

connection with a conspiracy to defraud the united states, 

to violate the International emergency economic Powers act 

(IeePa), to violate the trading with the enemy act (tWea), 

and to violate the bsa. of this amount, $250 million will be 

equitably shared with the Department of Justice forfeiture fund. 

Conclusion 

tfI discontinued all of its previously reported performance 

measures and began applying its composite performance metric 

“Impact of tfI programs and activities” during fiscal year 2009. 

tfI met its targets for its two measures. tfI achieved a high 

impact for its measure “Impact of tfI programs and activities.” 

the external review process for this performance metric still 

needs to be developed, but the implementation of this measure 

is a large step in the effort to measure performance for a policy 

office that also has operational responsibilities. tfI and the 

Department will continue to refine how the measure is rated 

and scored. In addition, teoaf achieved 93 percent of forfeited cash proceeds resulted from high-impact cases, exceeding 

its target of 75 percent. 

Moving Forward 

Enforcing the New Iran Legislation 

as part of treasury’s overall strategy with respect to Iran, ofac 

will investigate foreign financial institutions whose dealings 

with Iran may subject them to special measures related to 

legislation passed by congress on July 1. In addition to financial 

institutions, the focus on Iran will include cases involving shipping and the export of sensitive goods to Iran. ofac intends 

to continue announcing major enforcement actions involving 

alleged violations of Iranian sanctions over the coming year. by 

working closely with our colleagues at other agencies, ofac 

will increase the number of entities designated and enforcement 

cases resolved by ofac and the Department of Justice or the 

Department of commerce. 

Strengthening Economic Sanctions Against 

other Targets 

the treasury Department will work to implement a new 

sanctions program established by President obama targeting 

north korean illicit activity and will continue to implement 

pre-existing sanctions targeting north korean proliferation 

activities. the new sanctions program, announced on august 

30, enhances u.s. implementation of united nations security 

council resolutions 1718 and 1874 on north korea, addresses 

strategic goal: prevented terrorism and promoted the nation’s security 

through strengthened international financial systems 

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performance and accountability report | fiscal year 2010 

111 

threats to u.s. national security, and protects the international 

financial system from north korea’s abuse. 

consistent with u.s. foreign policy priorities, ofac will 

continue its strengthening of sanctions against targets such as 

sudan, Zimbabwe, and burma. 

Supporting the National Intelligence Strategy 

over the coming year, oIa will further develop analysis and 

collection to support the national Intelligence strategy on 

economic issues such as illicit finance and global cyber threats 

to financial systems. oIa will also increase cooperation across 

the intelligence community on international financial issues 

and threats to global financial stability. oIa will provide expert 

intelligence analysis to support targeted financial measures 

against the networks that fund terrorist and insurgent groups 

and support nuclear weapons proliferation, such as al-Qa’ida 

and its affiliates, the taliban, hamas, and hizballah. 

Combating Illicit Finance 

treasury will continue to work with interagency colleagues 

and international counterparts to promote strong controls and 

best practices for anti-money laundering and combating the 

financing of terrorism. this will guard against illicit finance in 

the formal financial sector. 

Supporting Efforts in Afghanistan 

treasury will deploy personnel to the atfc to enhance the 

collection, analysis, and dissemination of timely and relevant 

financial intelligence to combat funding and support for terrorist 

and insurgent networks in afghanistan. treasury will continue 

to investigate bulk cash movements and illicit financial flows in 

and out of afghanistan. treasury will deploy personnel to the 

attaché office within the u.s. embassy in kabul to augment 

treasury’s efforts to bolster the regulatory and investigative 

capacity of the afghan government to combat illicit finance. 

Supporting Southwest Border Efforts 

In fiscal year 2011, teoaf will focus its resources to enhance 

support of law enforcement’s southwest border strategy, 

national Money laundering strategy, and anti-terrorism financing efforts. teoaf will provide support to enhance criminal 

investigations related to criminal activities on the southwest 

border to deprive criminal enterprises of their profits and 

enabling assets. teoaf will also use its resources to strengthen 

outbound infrastructure at Ports of entry in order to effectively 

target bulk currency that is smuggled across the border to fuel 

drug and human smuggling enterprises. 

strategic objective: pre-empted and neutralized threats to the 

international financial system and enhanced u.s. national security 

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safer anD mOre transparent u.s. anD internatiOnal finanCial systems 

five performance measures are associated with this outcome. treasury exceed or met targets set for four of the five measures, and 

narrowly missed one. overall 81 percent of the measures exceeded their targets, and some targets were exceeded by large margins. 

Key Performance Measure Table 

the following table contains only key performance measures associated with this outcome. actual and target trends represent four 

years of data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/ 

management/dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011 

Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Average time to process enforcement matters (in years) FinCEN 1 1 0.8 120.0% -20.0% Exceeded 1  

Percent of federal and state regulatory agencies with memoranda of 

understanding/information sharing agreements (%) 

FinCEN 43 46 46 100.0% 7.0% Met 50  

Percent of FinCEN's compliance MOU holders finding FinCEN's 

information exchange valuable to improve the BSA consistency and 

compliance of the financial system (%) 

FinCEN 82 68 86 126.5% 4.9% Exceeded 86  

Percentage of bank examinations conducted by the Federal Banking 

Agencies indicating a systemic failure of the anti-money laundering 

program rule (%) 

FinCEN 2.1 5.2 1.6 169.2% -23.8% Exceeded 5.2  

Percentage of customers satisfied with the BSA E-Filing (%) FinCEN 94 90 96 106.7% 2.1% Exceeded 92  

Percentage of customers satisfied with direct access to BSA (%) FinCEN 74 74 74 100.0% 0.0% Met 74  

Percentage of FinCEN's Regulatory Resource Center Customers rating 

the guidance received as understandable (%) 

FinCEN 94 90 92 102.2% -2.1% Exceeded 90  

Share of BSA filings submitted electronically (%) FinCEN 82 71 83 116.9% 1.2% Exceeded 73  

The percentage of domestic law enforcement and foreign financial 

intelligence units finding FinCEN's analytical reports highly valuable (%) 

FinCEN 81 81 80 98.8% -1.2% Unmet 80  

Analysis of Performance Results 

fincen has 16 measures for fiscal year 2010, and 94 percent 

of its targets were achieved. five measures are used to score 

the focus area, “impact of activities to create safer and more 

transparent financial systems” for the overall tfI measure. 

those measures are: 

•	 average time to process enforcement matters 

•	 Percentage of fincen’s regulatory resource center 

customers rating the guidance received as understandable 

•	 Percentage of domestic law enforcement and foreign 

intelligence units finding fincen’s analytic reports highly 

valuable 

•	 Percentage of customers satisfied with the bsa e-filing 

•	 Percentage of customers satisfied with direct access to bsa 

fincen achieved a score of 7.8 out of 10 possible points. 

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

In the regulatory area, fincen continues to increase activities to 

monitor financial institutions examined for bsa compliance by 

state and federal regulators through the establishment of Mous 

to exchange compliance information. In 2010, fincen executed 

four additional Mous and met its fiscal year 2010 target of 46 

percent of federal/state regulatory agencies with Mous. these 

Mous help ensure effective application of the bsa regulations 

strategic goal: prevented terrorism and promoted the nation’s security 

through strengthened international financial systems 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

113 

across all regulated financial service industries by providing vital 

compliance data. fincen will continue collaborating with state 

insurance commissioners and other regulatory agencies to sign 

additional agreements to meet future targets. 

fincen surveys its compliance Mou holders to determine 

the impact of the information exchange to improve the bsa 

consistency and compliance of the financial system. In fiscal 

year 2010, 86 percent of them rated the information exchange 

as valuable, and fincen exceeded its target. fincen will 

continue to facilitate valuable relationships with Mou holders 

to meet future targets. 

fincen’s goal to provide financial institutions with understandable guidance through the bsa resource center is critical to 

institutions establishing anti-money laundering programs that 

comply with the bsa. fincen met its target in fiscal year 2010 

with 92 percent. to meet future targets, fincen will continue 

to strive for consistently high customer satisfaction levels. 

fincen also works closely with its regulatory partners to take 

enforcement action against financial institutions that systemically and egregiously violate the provisions of the bsa, including through imposition of civil money penalties when appropriate. enforcement action is essential to deter non-compliance 

with the bsa. In fiscal year 2010, fincen’s target was to 

process enforcement matters in 1.0 year, and fincen exceeded 

the target at 0.8 years. fincen will continue to actively manage 

casework to meet future targets. 

In the analytical area, fincen supports domestic law enforcement and international fIu partners by providing analyses 

of bsa and other financial information, and measures the 

percentage of customers finding fincen’s analytic reports highly 

valuable. the measure closely ties to how bsa information is 

used by law enforcement and international fIus to identify, investigate, and prevent abuse of the financial system. In fiscal year 

2010, fincen achieved 80 percent, narrrowly missing its target 

of 81 percent. fincen will continue its efforts to solicit input 

from customers on types of products they would like and possible 

ways to improve the structure of its reports to meet future targets. 

In the efficient management, safeguarding, and use of bsa 

information, fincen conducts a survey of the users of the bsa 

e-filing system to determine overall satisfaction and to identify 

where improvements are needed. fincen achieved 96 percent 

satisfaction level. fincen will continue outreach to e-filers and 

ensure the technology supports the demand. 

the following sections describe efforts undertaken by fincen 

in 2010. these results are the basis for assessing fincen’s 

impact and are reflected in their performance results. 

Leveraged Partnerships with U.S. Law 

Enforcement and Mexican Foreign 

Intelligence Unit 

fincen continued to leverage partnerships with u.s. law 

enforcement and the Mexican fIu to support the detection, 

interdiction, and investigation of the flow of illicit proceeds 

from narcotics and human smuggling into u.s. and Mexican 

financial institutions. In support of these efforts, fincen 

completed a joint study with the Mexican fIu of u.s. dollar 

currency flows between the u.s and Mexico. the study provides 

a more accurate baseline of u.s. dollar currency activity in 

Mexico from which both countries can more effectively measure 

the scope of bulk cash smuggling into Mexico and the effectiveness of future aMl and cash interdiction efforts. fincen 

dedicated a staff member to work with the Mexican fIu and 

undertook the following in support of u.s. and Mexican law 

enforcement efforts: 

•	 Produced a joint intelligence advisory with the national 

Drug Intelligence center (nDIc) on trends in trade based 

Money laundering and black Market Peso exchange 

•	 Initiated support to a newly-created southwest border 

anti-Money laundering alliance through the analysis of 

wire remittance data 

•	 Issued an advisory on a new Mexican regulation that may 

precipitate a significant change in recent cash smuggling 

trends and conducted studies on the impact of the new 

regulation on money from the region 

•	 Developed suspected Mexican cartel money laundering targets and referred them to u.s. and Mexican law 


enforcement
 

fincen continues to coordinate investigative follow-up of 

these targets with u.s. law enforcement and to develop plans 

and processes for future targeting efforts. 

strategic objective: pre-empted and neutralized threats to the 

international financial system and enhanced u.s. national security 

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114 

Collaborated with and Support to 

Foreign Intelligence Units 

fincen completed its sponsorship of the afghan fIu, known 

as fintraca, into the egmont group, the global organization 

of fIus. fintraca became a member of the egmont group in 

June 2010, allowing it to engage with the other 119 fIus that 

form the global network for sharing financial intelligence. fIus 

in the egmont group share information relating to thousands 

of investigations per year. the multi-year sponsorship process 

culminated with fincen’s on-site assessment of fintraca to 

ensure that the unit complied with egmont group standards. 

fintraca’s membership in the egmont group will benefit 

law enforcement agencies in the united states and throughout 

the world by facilitating the exchange of information through 

fIu channels. fincen also placed a staff member to work with 

fintraca to foster tactical information sharing between the 

fIu and u.s. law enforcement. 

fincen continued outreach and liaison activities to improve 

the quality and quantity of financial intelligence exchanged 

between fincen and foreign fIus. fincen continued its 

leadership role in the egmont group to promote effective information sharing. fincen played a key role on egmont group 

projects on enterprise-wide suspicious transaction report (str) 

sharing in the private sector and fIu issues relating to financial 

action task force (fatf) mutual evaluations. on behalf of 

the egmont group, fincen developed and managed the most 

comprehensive database on fIu information in the world. 

fincen created and disseminated tactical financial intelligence 

reports to egmont group fIus and managed case exchange with 

fIus on behalf of u.s. law enforcement and regulatory agencies. 

these intelligence products are integral to domestic and foreign 

investigations of money laundering, financial fraud, and terrorist 

financing around the world. 

President obama established the financial fraud enforcement 

task force (ffetf) in november 2009. With more than 20 

federal agencies, 94 u.s. attorneys’ offices, and state and local 

partners, ffetf is the broadest coalition of law enforcement, 

investigative, and regulatory agencies ever assembled to combat 

financial fraud. fincen also undertook efforts to expand information sharing across the u.s. government in a coordinated 

manner, worked to increase understanding of the value and 

utilization of bsa data for investigative purposes, and supported 

ffetf’s events with analytical packages and demonstrations. 

fincen also participated in committees and other working 

groups of the ffetf, including acting, along with the executive 

office for the u.s. attorneys, as co-chair of the task force’s 

training and Information sharing committee. 

Enhanced Mechanisms to Combat 

Mortgage and Loan Modification Fraud 

fincen continued to combat mortgage fraud, foreclosure 

rescue scams, and loan modification fraud. fincen published 

an advanced notice of proposed rulemaking on the possible 

application of aMl and suspicious activity reporting requirements to non-bank residential mortgage lenders and originators. 

the application of such rules would close a regulatory gap by 

requiring non-bank residential mortgage lenders and originators 

to guard against and report on illicit actors engaging in financial 

transactions. 

In addition, fincen published its latest mortgage fraud-related 

analytic report in July 2010, the eighth in a series of products 

describing filing trends, evolving patterns, emerging typologies, 

as well as analysis of depository institution suspicious activity reports (sars) that report mortgage fraud. the report contained 

information that may be beneficial to law enforcement, regulators, and the financial industries. In June 2010, fincen released 

a report specifically describing trends found in sars reporting 

loan modification and foreclosure rescue scams. the relevant 

sars increased from 28 reports filed by depository institutions 

and money services businesses in 2004, to over 3,000 sars filed 

in 2009. the sars in the sample dataset revealed that in the 

eight months between the issuance of an april 2009 fincen 

advisory, filers increased reporting by over 100 percent during 

the entire five-year period. the april 2009 fincen advisory 

provided indicators of loan modification and foreclosure rescue 

fraud and requested filers to report such activity in sars. 

fincen also continued to support u.s. government efforts to 

combat mortgage fraud and to bring relief to america’s housing 

market and homeowners by increasing its analytical support to 

investigations and prosecutions. fincen published an updated 

advisory to financial institutions on loan modification fraud 

in June 2010 and an advisory to financial institutions on fraud 

related to home equity conversion mortgages (hecMs) in 

april 2010. through its involvement in the ffetf, fincen 

leveraged the relationships and techniques it developed in the 

mortgage fraud context to initiate similar efforts in the areas of 

health care fraud and securities fraud. 

strategic goal: prevented terrorism and promoted the nation’s security 

through strengthened international financial systems 

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fincen was recognized by the DoJ for playing an important 

role in operation stolen Dreams, an effort over 3.5 months 

to take down mortgage fraud schemes across the country. the 

operation involved 1,215 criminal defendants nationwide who 

were allegedly responsible for more than $2.3 billion in losses. 

Collaborated to Detect Healthcare Fraud 

fincen proposed to work closely with the Departments of 

health and human services and Justice, and other federal and 

state law enforcement agencies to identify increasingly complex 

health care fraud schemes. fincen developed an initiative 

to use the bsa analytical assessments to identify the most 

egregious individual perpetrators and organized groups in health 

care fraud schemes. fincen is working with the health care 

fraud Prevention and enforcement action team (heat). 

heat brings investigators and prosecutors together in targeted 

geographical areas to target individuals and organizations who 

are defrauding the health care system. through this analytical 

process, fincen will be able to provide the investigators with 

an overall assessment of the targeted jurisdictions, as well as 

the organizations and individuals that are suspected of being 

engaged in health care fraud schemes. fincen already provided 

assistance to the largest federal health care fraud takedown in 

u.s. history: 94 people in four cities were charged for allegedly 

participating in schemes to submit more than $251 million in 

false Medicare claims. 

Outreach to Increase the Use of BSA 

E-filing 

fincen initiated an important outreach campaign to increase 

the use of its bsa e-filing Program and thereby reduce the volume of paper bsa forms being processed. as a part of that effort, 

fincen published an article on bsa e-filing in the october 

2009 sar activity review that outlined recent enhancements 

to the system and explained the benefits of filing electronically. 

fincen also developed and published an informational brochure 

highlighting the benefits of the bsa e-filing Program. using 

that brochure and in coordination with its federal government 

examination partners, fincen contacted the largest filers of 

paper currency transaction reports (ctrs) to explain the benefits of filing electronically. as a result of these efforts, a growing 

number of contacted institutions have adopted the bsa e-filing 

Program and the percentage of bsa filings filed electronically 

has increased from 71 percent in fiscal year 2008 to 83 percent 

in fiscal year 2010. fincen expects to continue and expand this 

promotional campaign into fiscal year 2011. 

Modernize BSA IT system 

In May 2010, fincen launched the design phase of the bsa It 

Modernization program. the modernization effort will enrich 

and standardize bsa data, evaluate and deploy analytical tools, 

establish more effective security technologies to enhance data 

confidentiality and integrity, and improve customer satisfaction 

with bsa systems. During the design phase fincen will begin 

defining the technology to support the business requirements 

for the new bsa system of record, basic and advanced analytic 

capabilities, enhanced e-filing functionality, as well as improved 

customer relations capabilities. fincen has already completed 

the necessary planning efforts and established the foundation to 

guide all future activities. 

Regulatory Efforts 

In the regulatory area, fincen’s policy efforts focus on efficient 

and effective bsa administration. this includes ensuring the 

consistent application of bsa regulations to regulated financial 

institutions, providing guidance on regulatory expectations, and 

initiating enforcement actions when appropriate. 

to enhance bsa compliance, fincen developed analysis criteria to more effectively leverage bsa data to identify potential 

non-compliant institutions. this strategy should enable fincen 

to enhance collaboration with law enforcement to identify 

sources of lead information and become even more proactive 

in identifying and taking action against non-compliant institutions, including targeted examination referrals and enforcement 

measures as warranted. 

fincen issued a final rule enhancing domestic and international information sharing to thwart money laundering and 

terrorist finance. this rule conforms fincen’s successful 314(a) 

program with the treaty agreements between the u.s. and the 

eu. the rule greatly benefits the u.s. by granting federal law 

enforcement agencies reciprocal rights to obtain information 

about suspect accounts in eu member states. the final rule also 

gives u.s. state and local law enforcement agencies access to 

the program and further clarifies that fincen and certain units 

of the treasury Department can access the program to increase 

the quality of analytical support provided to law enforcement. 

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international financial system and enhanced u.s. national security 

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fincen published guidance on obtaining and retaining 

beneficial ownership information. Information on beneficial 

ownership in account relationships provides another tool for 

financial institutions to better understand and address money 

laundering and terrorist financing risks, protect themselves from 

criminal activity, and assist law enforcement with investigations 

and prosecutions. fincen worked closely with its regulatory 

partners to develop the guidance, which was issued jointly with 

the federal banking agencies and the securities and exchange 

commission. 

fincen is close to finalizing rules strengthening the confidentiality of sars and released guidance that permits certain 

affiliates of depository institutions, broker-dealers in securities, 

mutual funds, futures commission merchants, and introducing brokers in commodities to share sars within a corporate 

organizational structure for purposes consistent with title II 

of the bsa. the revised rules will help financial institutions 

better facilitate compliance with the applicable requirements 

of the bsa and more effectively implement enterprise-wide 

risk management, resulting in better risk assessment and better 

reporting quality. 

fincen published an assessment of insurance sar reporting, 

an assessment of the impact of streamlined ctr exemption 

rules, and a simplified, revised regulatory structure in the 

federal register to reorganize bsa regulations under chapter 

X of the code of federal regulations. the assessments provide 

valuable information to the industry, and the reorganization 

would ensure that financial institutions are able to identify 

bsa obligations in a more understandable manner when the 

structure becomes effective in fiscal year 2011. 

In March 2010, fincen announced the assessment of a civil 

money penalty, $110 million, against Wachovia bank. the 

action represents the largest penalty action to date against a 

financial institutions by fincen for violations of the bsa. 

Conclusion 

fincen missed only one target this year compared to two last 

year. the one target not achieved, “the percentage of domestic 

law enforcement and foreign financial intelligence units finding 

fincen’s analytical reports highly valuable,” narrowly missed 

the target by one percentage point. overall 81 percent of the 

measures exceeded their targets, and some targets were exceeded 

by large margins. actual results for 37.5 percent of measures 

showed decreases from last year, while 50 percent saw increases 

and 12.5 percent saw no change. fiscal year 2010 performance 

exceeded targets for 10 measures. 

Moving Forward 

fincen’s future plans in the regulatory area will improve its 

ability to strengthen financial system security and enhance u.s. 

national security. to ensure financial systems are resistant to 

abuse by money launderers, terrorists and other perpetrators of 

financial fraud and crimes, fincen will: 

•	 finalize regulations for non-bank residential mortgage 

lenders and originators that apply aMl program and sar 

requirements. this initiative will support efforts to prevent 

criminal actors from abusing the housing markets and help 

bring other participants in the loan and finance industry 

under the bsa; 

•	 finalize proposed amendments to clarify the scope of the 

money services business (Msb) definitions to the extent 

consistent with appropriately managing money laundering 

risks in this industry; 

•	 finalize proposed regulations to bring providers and certain 

sellers of prepaid access cards into more comprehensive 

bsa requirements, including the aMl program, suspicious 

activity reporting, registration, and customer identification 

requirements; 

•	 continue to conduct analysis in support of regulatory 

initiatives (such as identity theft) and efforts to combat 

mortgage loan fraud. the analysis will identify emerging 

trends (such as commercial real estate fraud); and 

•	 continue to enhance proactive compliance and enforcement efforts, including targeted steps to increase money 

transmitter registration. fincen will also continue to 

strengthen oversight of recently-covered industries under 

the bsa by signing additional information sharing agreements with state insurance regulators and working cooperatively with the Irs and state regulators on consistent, 

risk-based examination procedures. 

fincen’s future plans in the analytical area will improve its 

ability to strengthen financial system security and enhance 

u.s. national security. to detect and deter financial fraud, 

strategic goal: prevented terrorism and promoted the nation’s security 

through strengthened international financial systems 

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money laundering, terrorism financing, and other illicit activity, 

fincen will: 

•	 continue to work with law enforcement and financial and 

international partners to combat Mexican cartel-related 

drug, gun, and human smuggling operations in Mexico and 

along the southwest border by improving the sharing and 

analysis of related financial information; 

•	 continue to work with the southwest border anti-Money 

laundering alliance and other federal or state efforts to 

interdict and investigate illicit money laundering on the 

southwest border through the detection of trends, patterns, 

and significant criminal activity in wire remittance data. 

under a state agreement, fincen will receive an estimated 

100 million records associated with wire transfers to and 

from the Mexican border area from 2005 to 2013; 

•	 support federal law enforcement efforts to combat health 

care fraud by initiating a process to identify potential 

health care fraud perpetrators and by providing analytical 

support to investigations and prosecutions; 

•	 expand the range of analytical products and identify more 

efficiencies in case management of foreign fIu requests. 

fincen intends to dramatically increase the number of 

proactive intelligence reports sent to foreign counterpart 

fIus. Proactive intelligence reports will enable foreign law 

enforcement agencies to develop new cases or enhance 

existing ones; 

•	 Increase joint analytical projects with foreign fIu counterparts through intensified operational engagements with 

key strategic partner fIus. for example, fincen plans to 

replicate with other foreign fIus a current analytical initiative involving fincen, the Mexican fIu, and Irs-cI; and 

•	 enhance international information sharing through 

expanded collaboration with international bodies, including the egmont group, fatf, regional bodies, the World 

bank, and the IMf. 

fincen’s future plans will improve its ability to strengthen 

financial system security and enhance u.s. national security. 

to ensure efficient management, safeguarding and use of bsa 

information, fincen will: 

•	 continue to modernize bsa information management and 

analysis 

•	 Deploy the new advanced analytical tool on the current 

technical environment 

•	 establish disaster recovery infrastructure 

•	 Deploy the registered user Portal, which will provide 

a common user interface and authentication process for 

accessing bsa data 

•	 begin the development efforts to build the bsa new 


system of record and basic query capabilities
 

•	 Implement the ability to electronically enter select forms 

that are currently accepted only via paper filing 

strategic objective: pre-empted and neutralized threats to the 

international financial system and enhanced u.s. national security 

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strategic goal: 

ManageMent anD organIZatIonal eXcellence 

strategic objective: 

enabled and effective treasury department 

the Department of the treasury strives to maintain public trust 

and confidence through exemplary leadership and creating a 

culture of excellence, integrity, and teamwork. the Department 

is dedicated to serving the public interest and focused on delivering results that align with its strategic objectives. Management 

enables this through a strong institution that is citizen-centered, 

focused on achieving results, and is accountable and transparent 

to the american people. 

strategies to achieve this objective are improved acquisition 

practices, investing in people and technology, implementing 

quarterly performance and budget reviews, and aligning and 

managing resources. the treasury Department is committed 

to planning and assessing performance, reviewing results, and 

working towards continuous improvement. 

the bureaus and offices responsible for achievement of this 

objective are: 

•	 office of the treasury assistant secretary for Management 

and chief financial officer (asM/cfo) which includes 

the Deputy chief financial officer (Dcfo), budget, 

Planning, human capital, Information technology, 

Procurement, Privacy, and operations 

•	 office of the treasury Inspector general (oIg) 

•	 the treasury Inspector general for tax administration 

(tIgta) 

•	 office of the special Inspector general for the troubled 

asset relief Program (sIgtarP) 

the outcomes associated with this objective are: 

•	 a citizen-centered, results oriented and strategically 

aligned organization 

•	 exceptional accountability and transparency 

fifty percent of measures associated with this objective had 

targets that were more aggressive compared to 2009. 

Budget Trend 

Enabled and 

Effective 

Treasury 

Department 

$0

$1,250,000

$866,319

$1,138,100

$935,132$839,007$622,649$425,196$444,153 

2004 2005 2006 2007 2008 2009 2010 

Dollars (in Thousands) $1,000,000

$750,000

$500,000

$250,000

Fiscal Year 

Dollars (in Thousands) 

Fiscal Year 

Performance 

Cost Trend 

Enabled and 

Effective 

Treasury 

Department 

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$858,264$1,032,818$862,578$766,972$507,891$295,769$337,389 

2004 2005 2006 2007 2008 2009 2010 

Performance Cost 

by Outcome 

Enabled and 

Effective 

Treasury 

Department 

79.3% 

20.7% Exceptional A citizen- accountability centered, and transparency results-oriented 

and strategically 

aligned 

organization 

strategic goal: management and organizational excellence 

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performance and accountability report | fiscal year 2010 

119 

a Citizen-CentereD, results OrienteD, anD strategiCally aligneD 

OrganizatiOn 

based on performance results, treasury succeeded in achieving this outcome for fiscal year 2010. 

Key Performance Measure Table 

the following table contains only key performance measures associated with this outcome. actual and target trends represent four 

years of data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/ 

management/dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011 

Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Complete Investigations of EEO Complaints Within 180 Days 

(%) 

DO 65 65 86 132.3% 32.3% Exceeded 65  

Percent of complainants informally contacting EEO (for the 

purpose of seeking counseling or filing a complaint) who 

participate in the ADR Process (%) 

DO 35 35 51 145.7% 45.7% Exceeded 40  

Customer Satisfaction Index - Financial Mgmt Admin Support 

Services (%) 

Treasury 

Franchise Fund 

89 80 81 101.3% -9.0% Exceeded 80  

Operating expenses as a percentage of revenue--Financial 

Management Administrative Support (%) 

Treasury 

Franchise Fund 

4.72 12 6 150.0% 27.1% Exceeded DISC  

Analysis of Performance Results 

In 2010, treasury exceeded all of its performance goals for 

this strategic outcome. furthermore, all measures are now 

trending in a desirable direction. treasury’s equal employment 

opportunity (eeo) results are particularly positive suggesting 

strengthening of the program. the data also suggests that while 

the Department successfully achieved goals for priorities related 

to this outcome, targets for these measures may not be sufficiently aggressive. 

Procurement 

the office of the Procurement executive (oPe) is responsible 

for providing department-wide acquisition management, improving guidance for procurement programs and systems, bureau-level 

procurement operation evaluation, and facilitating strategic 

procurement. no performance goals for agency-wide procurement were included in treasury’s 2010 performance budget. 

the Department executed its fiscal year 2010 plan to meet the 

oMb acquisition improvement mandate to deliver 3.5 percent 

in procurement savings in fiscal year 2010 (and fiscal year 2011) 

and to achieve a ten percent reduction in high risk contracting 

in fiscal year 2010. as of september, treasury had exceeded 

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

both goals, documenting in excess of $241.9 million in savings 

vs. the goal of $158.4 million, and $129.4 million in high risk 

contracting reduction versus the goal of $48.8 million. the 

Department has already taken steps to ensure achievement of 

the required savings of 3.5 percent in fiscal year 2011 ($158 

million) and additional reduction in use of high risk contracting 

authorities. While oMb has not mandated a fiscal year 2011 

high risk reduction goal, treasury elected to continue actively 

transitioning to lower risk contracting strategies. treasury will 

achieve its targets through active management of acquisition 

operations and increased examination of high dollar/risk 

contracts. 

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120 

the Department plan includes specific strategic sourcing 

activities that were initiated in both fiscal year 2009 and fiscal 

year 2010. treasury mandated agency-wide use of the general 

services administration (gsa) federal strategic sourcing 

Initiative (fssI) for office supplies 2 (os2) and Domestic 

Delivery services 2 (DDs2). the Department also has initiated several treasury-wide strategic sourcing initiatives, which 

include consolidation of software (adobe/symantec) and 

subscription services. 

to promote collaboration and make the Department more 

efficient, treasury held the first ever Joint bureau chief 

Procurement officer (bcPo)/ chief financial officer (cfo) 

/ chief Information officer (cIo) council meeting focused 

on acquisition reform. later, chief human capital officers 

(chcos) were included in the governance model. this “Quad 

council” identified teams to develop and lead treasury-wide 

acquisition improvement initiatives supporting use of strategic 

sourcing concepts, demand management, commodity councils, 

common technology for visibility and access of data, and 

improved governance. analysis of research is ongoing with 

future actions to be determined based on findings and corporate 

potential. 

as required by the National Defense Authorization Act for fiscal 

year 2009 and the office of federal Procurement Policy (ofPP), 

treasury developed an acquisition human capital Plan to 

be used to guide the growth in capacity and capability of its 

acquisition workforce over the next five years. the Plan was 

submitted to ofPP in March 2010 and will be updated annually. the Plan will serve as a component of the agency’s budget 

preparation beginning with the fiscal year 2012 budget cycle. 

Information Technology (IT) 

the office of the chief Information officer is responsible for 

all areas of information and technology management. With an 

annual It budget of over $3 billion dollars, the Department is 

focused on enabling innovation in support of the Department’s 

expanding financial and economic missions while also increasing the operational efficiency and effectiveness of It assets. 

no performance goals for agency-wide It were included as 

part of treasury’s fiscal year 2010 performance budget. In light 

of the dynamic environment within which treasury operates, 

treasury’s It program is focused on the following areas. 

Using taxpayer funding wisely by leveraging 

IT investments 

treasury is actively using the federal It Dashboard to monitor 

and assess its key It investments. 

While the results for cost and schedule variance in fiscal year 

2009 showed marked improvement from 2008, they were not indicative of treasury’s performance due to the way in which data 

was being captured. going forward ocIo is reviewing options 

on what statistics act as best indicators of performance. these 

metrics are annual snapshots and don’t reflect performance 

throughout the year. Ideally, future measures and benchmarks 

will be consistent with data used by the It Dashboard. the 

project manager qualification measure will be reviewed by 

ocIo for follow-up action. the measure requires a longer term 

personnel development and training solution. 

Measure 

Fiscal 

Year 

2008 

Fiscal 

Year 

2009 

Fiscal 

Year 

2010 Change 

Percent of IT investments reported as 

“red” for cost variance (greater than 

10% variance from target) 

40.33% 1.7% 26% 24.3% 

Percent of IT investments reported as 

“red” for schedule variance (greater 

than 10% variance from target) 

19.4% 0% 9% 9% 

Percent investments reported that 

the Project Manager was validated, 

according to 1) Federal Acquisition 

Certification for Program and Project 

Managers or 2) Defense Acquisition 

Workforce Improvement Act criteria, 

as qualified 

77.42% 83.05 69% -14.05% 

additionally, treasury is actively engaged in data center 

consolidation efforts in support of green It and real Property 

Management. In august 2010, the Department submitted its 

strategy for reducing the number of treasury data centers to 

oMb. In support of this strategy, the treasury cIo council 

approved proposals of specific initiatives to consolidate and 

optimize the Department’s data centers. It is anticipated that 

the Department can increase the efficiency of its data centers in 

support of energy reduction and release of real property. 

one specific initiative is the fiscal It consolidation. fMs and 

bPD initiated a project to consolidate the data centers across 

the two bureaus to help achieve the secretary’s objective of 

increasing the utilization and efficiency of combined It assets, 

while reducing technology costs. the fiscal It effort includes 

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121 

consolidation of five data centers into two shared by both bureaus, creation of a single corporate governing body, in-sourcing 

of select contracted functions, and consolidation of application 

development methodologies and associated infrastructure, all 

leading to a more “green” approach to delivery of It services. 

both fMs and bPD anticipate savings due to reductions in 

energy consumption, equipment, software, and staff. 

Enabling an information centric organization 

treasury investments such as enterprise content Management, 

the Internal revenue service’s customer account Data engine 

II, and fincen’s It Modernization are demonstrably focused 

on improving mission performance. effective use of It will also 

enable treasury to rapidly begin operations as assigned by the 

Dodd–frank act. In addition to business capabilities, treasury 

It will enable greater public access to data by increasing the 

amount of public data that are readily accessible and in machine 

readable formats. 

to provide timely reporting and monitoring of select cyber 

security metrics, treasury developed and deployed a Web-based 

dashboard that provides real time analysis and an indexed cyber 

security posture. this dashboard can be easily updated to reflect 

changes in metrics reported to oMb and to meet evolving cyber 

security status monitoring and trend analysis requirements. 

Controlling and protecting Treasury 

information assets 

Within an enterprise as interconnected as treasury, security 

is not only essential for protecting information assets, but is 

more importantly a key enabler for many elements of treasury’s 

business mission. two of treasury’s strategic security objectives include the Department-wide use of homeland security 

Presidential Directive-12 (hsPD-12) based credentials for 

logical access to business applications, and the enterprise-wide 

use of data loss prevention tools to monitor for and prevent the 

accidental leakage of information. 

to further protect the Department’s sensitive business information, treasury is deploying the capability to monitor the use of 

illegal and unauthorized software in its networks and systems. 

this capability will help prevent software piracy and the introduction of hostile software which would put treasury’s It-based 

business processes and information at risk of theft, compromise, 

and disruption. 

Providing reliable and robust computing, 

information and communication services 

treasury operates one of the largest civilian wide-area networks 

in the united states. With a significant percentage of its 

workforce being mobile, treasury demands a ubiquitous, fullfeatured, and cost effective communications service. treasury 

will continue to provide high performing, elastic services by 

building on fiscal year 2010 successes in migrating to a common, 

more cost effective wide-area network. 

the Department is currently modernizing several web sites 

including treas.gov to increase transparency, accessibility, 

navigability, and usability. to date, treasury has completed an 

assessment of the current treas.gov website and is in the process 

of developing the new design. treasury is moving from an officebased design approach to one which responds to user interests. 

the treas.gov website will be the first federal website rated 

at the Federal Information Security Management Act (fIsMa) 

moderate level to be hosted on the amazon cloud computing 

platform. additionally, treasury deployed MyMoney.gov to provide financial education to the general public one month ahead 

of schedule in fiscal year 2010. finally, treasury also deployed 

web applications that will transform the way the Department 

attracts and retains job candidates by providing the information 

and functionality needed to decide on a career with treasury. 

Management and Budget 

the office of the Deputy assistant secretary for Management 

and budget (DasMb) is responsible for strategic planning and 

performance management, budget formulation and execution, 

program evaluation, and special projects, such as recovery act 

coordination for the Department. no performance goals related 

to DasMb are included in treasury’s 2010 performance budget. 

In fiscal year 2010, the Department’s fiscal year 2012 budget 

submission was meticulously reviewed and prepared to establish 

funding based on key priorities. treasury also worked to realize 

savings during this fiscal year by only funding top priority needs 

and reallocated savings towards programs aligned with treasury’s 

and the President’s priorities. 

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122 

During the fiscal year, the Deputy secretary held quarterly 

performance and budget reviews with bureaus and policy offices. 

these reviews are structured after the “stat” model developed 

by police departments to generate data-driven decisions. During 

these sessions, bureau mission statements and performance 

measures are re-evaluated, and then performance results are 

reviewed. budget discussions were also included in the reviews. 

Operations 

the office of the Deputy assistant secretary for Departmental 

offices operations provides management and administrative 

support for the offices and employees in treasury’s departmental, or headquarters, offices. no performance goals related 

to Departmental operations are included in treasury’s 2010 

performance budget. 

key Departmental operations accomplishments for fiscal year 

2010 are: 

•	 coordination with gsa for the location planning for the 

stand-up of the consumer financial Protection bureau 

•	 establishing and maintaining “all green” on the 


environment and energy scorecard for two reporting 


periods covering six months each
 

•	 complete hsPD-12 Physical access control implementation for all Departmental office owned and leased locations 

Human Capital 

the Deputy assistant secretary for human resources and chief 

human capital officer is responsible for all areas of human 

capital management. 

Effectively managing and utilizing human 

resources 

In fiscal year 2010, treasury implemented several changes to 

the senior executive service (ses) performance management 

process to clarify performance expectations and support more 

meaningful distinctions in ratings and rewards, and assessment 

of those changes will continue in fiscal year 2011. because 

ses ratings reform has been identified as a major priority of 

the President’s Management council, treasury plans to pursue 

additional initiatives in fiscal year 2011 related to performance, 

hiring, and executive development. 

treasury worked to address administration guidance on improving labor management relationships and managing a multisector workforce. It established new labor management forums 

in cooperation with the national treasury employees union 

and benchmarked contractor and federal employee performance 

within a key treasury data-center against 80 similar facilities. 

the Department also began implementation of human capital 

efforts related to the Dodd-frank act, such as new classifications and pay systems for new offices and bureaus. 

Developing and retaining Treasury’s 

workforce 

During fiscal year 2010, treasury implemented action plans 

that focused on areas for improvement as identified in the 2008 

federal human capital survey. these efforts paid off with 

improved scores on the 2010 employee Viewpoint survey (now 

renamed the fedView survey). the Department increased 

positive responses in each area, or index, of the survey by 

at least two percent. treasury efforts to improve scores on 

the survey and across various indices based on the survey 

results will continue into the future. additional detail on the 

survey methodology is available at the office of Personnel 

Management (oPM) website: http://www.opm.gov/surveys/ 

results/Employee/2010Employee SurveyResults.asp 

Broadening and diversifying Treasury’s talent 

pool 

treasury continued to create effective recruitment strategies and 

utilize available flexibilities to attract a diverse pool of highly 

qualified candidates, both external and internal, sufficient to ensure that the Department fulfills its mission requirements. fiscal 

year 2010 marked the second successful year of the hamilton 

fellows program. a total of 42 new fellows were hired treasurywide compared to 16 in fiscal year 2009. the Department 

developed a new hiring strategy for mid-career professionals 

during the fiscal year. finally, treasury also continued to recruit 

finalists from the oPM sponsored Presidential Management 

fellowship program. 

the Department’s fiscal year 2010 progress was consistent with 

government-wide human capital initiatives including hiring 

reform, veterans hiring, hiring persons with disabilities, and 

expanding of benefits to same sex domestic partners. treasury 

made significant progress in addressing the presidential 

memorandum on improving the federal hiring process by 

strategic goal: management and organizational excellence 

part 2: annual performance report
performance and accountability report | fiscal year 2010 

123 

strengthening communication with applicants, streamlining 

and standardizing vacancy announcements, providing more 

information to managers, and process mapping departmental 

hiring efforts. treasury retained its multi-year record as the 

cabinet level agency with the highest employment of individuals with targeted disabilities. further, treasury created a steering 

committee which has substantially improved the process for 

hiring veterans. 

High Priority Performance Goal: 

Significantly Increase the Number of 

Paperless Transactions with the Public 

In addition to greatly reducing costs, enhancing customer 

service and minimizing treasury’s environmental impact, the 

move from paper to electronic transactions will increase reliability, safety, and security for benefit recipients and taxpayers. 

the initiative is expected to save more than $400 million and 

12 million pounds of paper in the first five years alone while 

delivering safe and secure payments in an efficient and reliable 

manner. 

In 2010 treasury began implementing paperless initiatives. 

first, treasury expects individuals receiving social security, 

supplemental security Income, Veterans, railroad retirement, 

and oPM benefits to receive payments electronically. Individuals 

will be able to receive benefits either through direct deposit into 

a bank account or treasury’s Direct express debit card. today, 

one million americans are receiving their benefit payments 

through Direct express and they have found the card safe, 

convenient, and easy to use. the requirement will apply to new 

enrollees beginning on March 1, 2011 and to existing check 

recipients beginning on March 1, 2013. currently, 85 percent of 

federal benefit recipients receive their payments electronically. 

Moving all recipients of these benefits to electronic payments is 

expected to save upwards of $300 million in the first five years. 

second, businesses currently permitted to use paper federal tax 

Deposit coupons will have to make those deposits electronically 

beginning in 2011 with a few exceptions, primarily businesses 

with $2,500 or less in quarterly tax liabilities that pay when 

filing their returns. currently, nearly 98 percent of all business tax dollars are paid electronically through treasury’s free 

eftPs. Irs research has shown that businesses using eftPs are 

31 times less likely to make an error. this change will save an 

estimated $65 million in the first five years. 

finally, treasury eliminated the option to purchase paper savings bonds through payroll deductions for federal employees on 

september 30, 2010 and will eliminate it for the private sector 

by January 1, 2011. this policy covers only paper savings bonds 

purchased through payroll sales; individuals will still be able to 

purchase paper savings bonds at financial institutions for themselves and as gifts. Payroll savers will be encouraged to continue 

their purchases through treasuryDirect, a web-based system that 

allows investors to buy and hold electronic treasury securities. 

transitioning employees to electronic payroll purchases saves 

employers administrative costs and allows employees to manage 

their own bond accounts. this is estimated to save nearly $50 

million in the first five years. 

treasury has made substantial progress consistent with this effort. fMs exceeded its target for percentage collected electronically of total Dollar amount of federal government receipts, 

reaching 85 percent. bPD has been conducting a public awareness campaign to inform its customers about the elimination of 

paper payroll savings bonds and the alternative of purchasing 

electronic securities in treasuryDirect. the data demonstrates 

that bPD has been successful in moving its customers to 

electronic securities. In the fourth quarter of fiscal year 2010, 

new treasuryDirect accounts increased 268 percent to 47,508 

compared to 12,902 new accounts in the fourth quarter of fiscal 

year 2009. also, in the fourth quarter of fiscal year 2010 dollar 

sales of electronic savings bonds rose 54 percent to $23,150,292 

compared to $15,031,333 in the fourth quarter 2009. During 

the same period, sales of paper savings bonds decreased from 

$386,179,000 in the fourth quarter of 2009 to $383,115,000 in 

the fourth quarter of 2010. additionally, the office of the fiscal 

assistant secretary (ofas) has led an interagency work group 

to publish proposed regulations to solve the growing problem 

of garnishment of exempt federal benefits which will in turn 

facilitate additional electronic benefits payments rather than 

payment by check. 

Conclusion 

the Department exceeded its targets for its strategic outcome: 

“a citizen centered, results oriented, and strategically 

aligned organization” for fiscal year 2010. the Department’s 

initiatives are moving towards improved management across 

programs. 

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124 

Moving Forward 

•	 During fiscal year 2011, treasury will institutionalize its 

quarterly performance and budget reviews. treasury will 

continue to work to formalize performance metrics in all 

management functions. 

•	 Data for treasury’s greenhouse gas emissions are not 

available annually, however treasury is still committed to 

reducing greenhouse gas emissions by 33 percent by 2020. 

the Department will continue to work towards reducing 

emissions and reporting when possible. 

•	 the Department will continue to implement hiring reform, 

including decreasing the time to hire, improving the 

pipeline of candidates, and supporting veterans and those 

with disabilities. 

•	 the 2011 goals of the Paperless initiative include increasing electronic payment, collections, tax filing, and savings 

bonds transactions by 33 percent by the end of fiscal year 

2011 and increasing the individual e-file rate to 74.7 

percent. 

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part 2: annual performance report
performance and accountability report | fiscal year 2010 

exCeptiOnal aCCOuntability anD transparenCy 

achieving and maintaining exemplary accountability and transparency is critical for the treasury Department as the primary financial agency for the u.s. government. the Department follows proper internal controls that serve to deter and eliminate fraud, waste, 

and abuse, while increasing efficiency and effectiveness. 

Key Performance Measure Table 

the following table contains only key performance measures associated with this outcome. actual and target trends represent four 

years of data where available. the full suite of measures with detailed explanations is available at http://www.treasury.gov/offices/ 

management/dcfo/accountability-reports. 

Key Performance Measure Bureau 

2009 

Actual 

2010 

Target 

2010 

Actual 

Percent 

of Target 

Achieved 

Percent 

Change in 

Actual 

Performance 

Rating 

2011 

Target 

4-year 

Target 

Trend 

4-year 

Actual 

Trend 

Percentage of timely completed Planned Corrective Actions 

(PCAs) (%) 

DO 85.6 87.5 88.4 101.0% 3.3% Exceeded 90  

Number of completed audit products SIGTARP 3 12 9 75.0% 200.0% Unmet 12  

Percent of recommendations implemented (%) SIGTARP 100 70 43 61.4% -57.0% Unmet 70  

Congressional requests for testimony completed SIGTARP 9 4 7 175.0% -22.2% Exceeded 4  

Percentage of investigations accepted by prosecutors (%) SIGTARP 95 50 100 200.0% 5.3% Exceeded 55  

Percentage of preliminary investigations that are converted 

into full investigations (%) 

SIGTARP 50 35 80 228.6% 60.0% Exceeded 40  

Percentage of all cases that are joint agency/task force 

investigations (%) 

SIGTARP 60 30 50 166.7% -16.7% Exceeded 35  

Percentage of hotline complaints referred for investigation or 

to OFS within 14 days of receipt (%) 

SIGTARP 77 60 74 123.3% -3.9% Exceeded 65  

Number of completed audit products OIG 68 62 68 109.7% 0.0% Exceeded 62  

Percent of statutory audits completed by the required date (%) OIG 100 100 50 50.0% -50.0% Unmet 100  

Percentage of all cases closed during fiscal year that 

were referred for criminal/civil prosecution or Treasury 

Administrative action (%) 

OIG 100 70 93 132.9% -7.0% Exceeded 70  

Percentage of all cases that were accepted by prosecutors, 

referred for agency action, or closed during fiscal year and 

were completed within 18 months of case initiation (%) 

OIG 92 70 66 94.3% -28.3% Unmet 70  

Percentage of audit products delivered when promised to 

stakeholders (%) 

TIGTA 81 65 76 116.9% -6.2% Exceeded 70  

Percentage of recommendations made that have been 

implemented (%) 

TIGTA 91 83 95 114.5% 4.4% Exceeded 85  

Percentage of results from investigative activities (%) TIGTA 83 79 87 110.1% 4.8% Exceeded 80  

Legend Symbol 

Favorable upward trend 

Favorable downward trend 

Unfavorable upward trend 

Unfavorable downward trend 

No change in trend, no effect 

No change in trend, favorable effect 

No change in trend, unfavorable effect 

Baseline B 

strategic objective: enabled and effective treasury department 125 

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126 

Analysis of Performance Results 

the Department exceeded targets for 73 percent of performance 

measures in this section. of the four measures (27 percent) that 

did not meet the target, the average percent of target achieved 

was 70 percent. treasury discontinued two measures: one in 

fiscal year 2010 and one in fiscal year 2009. results suggest 

that treasury has room for improvement in this area and that 

challenging targets have been set. oIg’s audit completion 

metrics were substantially affected by material loss review work 

for failed banks. oIg’s ability to meet this metric in fiscal year 

2011 will depend largely on the number and sizes of future bank 

failures compared to available oIg audit resources. tIgta 

exceeded targets for all of its measures by at least 11 percent. 

tIgta should consider setting more aggressive targets for 

measures related to audit products delivered and recommendations implemented as both also had undesirable target trends. 

sIgtarP’s completed audit product measure target may have 

been overly aggressive. although sIgtarP did not reach its 

goal of producing 12 audit products in fiscal year 2010, it did exhibit a 200 percent increase in completed audits (from three to 

nine). sIgtarP did not meet its implementation rate measure; 

it anticipated a higher implementation rate by ofs, but it was 

not fully met. ofs is working on implementing the recommendations, and planned corrective action dates extend into fiscal 

2011. sIgtarP will continue to monitor the implementation 

of these recommendations. 

Privacy, Transparency and Records 

the office of the Deputy assistant secretary for Privacy, 

transparency, and records (DasPtr) exists to strengthen privacy and disclosure. civil liberties functions have been included 

to take advantage of existing privacy processes, and the records, 

library, and orders and directives programs are included because 

they are significantly interrelated with the privacy and disclosure programs. DasPtr sets the standard for the protection, 

access, and appropriate disclosure of treasury’s information, and 

provides support for these activities so that program offices may 

concentrate on their core functions. 

In april 2010, the Department of the treasury published its first 

open government Plan, which represents the beginning of the 

Department’s formal implementation of the open government 

Directive. oMb validated that the plan met every directive requirement. an open government steering committee has been 

convened with representatives from each of treasury’s bureaus 

to develop guidance and provide leadership on these activities 

across the Department. the Department released 84 data sets 

to date, completed a number of stakeholder outreach efforts, 

and began a more focused approach to tracking reduction in the 

freedom of Information act (foIa) request backlog. In addition, DasPtr identified cost savings from open government 

initiatives, developing a cost-benefit matrix and tracking the 

impact of proactive information disclosure on FinancialStability. 

gov on the number of foIa requests for ofs. 

the Department of the treasury received a leading Practices 

award for Participation and collaboration for achievement 

above and beyond the requirements of the Directive. this award 

recognized treasury as an agency that outlined the best and 

most innovative strategies for promoting open government over 

the next two years. treasury was only one of eight agencies to 

receive an award. 

the office of Disclosure services submitted the final version 

of the chief foIa officer’s report in March 2010 to meet the 

requirement of submission to the attorney general by March 

15, 2010. the requirement supports the principles of transparency and openness in government. agencies report on the steps 

taken to apply the presumption of disclosure, including proactive disclosure activities, to greater utilization of technology, 

and steps taken to reduce backlogs and improve timeliness in 

responding to foIa requests. 

In January 2010, DasPtr launched a lean six sigma study 

for foIa requests processing. the objective was to analyze 

foIa processes within Departmental offices. the plan was to 

enable the Department of the treasury to promptly respond to 

foIa requests within statutory requirements, increase proactive 

disclosure of information, eliminate the foIa requests backlog, 

and ensure sensitive or complex foIa requests are processed 

properly. this will result in disclosure of information more 

efficiently, accurately, and rapidly to the american public to 

promote public trust and government accountability through 

increased openness and transparency. 

the DasPtr was designated as lead for treasury’s Departmentwide the enterprise content Management (ecM) initiative 

during fiscal year 2010. ecM will enable the Department of 

treasury to create structure for managing information and 

complying with foIa requests. In the long term, treasury 

expects that the project will improve productivity, increase cost 

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performance and accountability report | fiscal year 2010 

127 

savings, provide user satisfaction, and improve response time to 

foIa requests. 

the Department of the treasury has embraced digitization in 

another effort to make information more readily available to the 

public through the internet. treasury’s library maintains several 

unique specialized collections. the Department has began 

digitizing those collections with a goal to digitize 20 percent 

of the collection in fiscal year 2010 and 20 percent within the 

following four years. converting these materials to high quality 

digital format will provide historical preservation of the materials. the materials to be digitized include legislative histories 

of laws relevant to the treasury Department compiled by the 

library staff over the last 50 years, treasury press releases from 

the 1930s forward, the treasury annual reports from 1789, and 

studies conducted by the treasury Department. 

In accordance with sec. 522 of the Consolidated Appropriations 

Act, the Department is required to have a full accounting of its 

Personally Identifiable Information (PII) holdings. the office 

of Privacy and civil liberties (oPcl) met this requirement by 

completing a survey of PII holdings in Departmental offices and 

the bureaus and submitting a report on the results on time. this 

survey captured all systems, paper and electronic, that contain PII. 

Office of the Deputy Chief Financial 

Officer 

Dcfo tracks the closure of Pcas addressing recommendations 

in oIg, gao, tIgta, and sIgtarP audit reports. the 

timeliness of Pca completion goal for fiscal year 2010 was 87.5 

percent. treasury exceeded the goal for fiscal year 2010 and 

closed out the year with a rate of 88.4 percent. the prior two 

fiscal year’s timeliness of Pca completions were 83 percent in 

fiscal year 2008 and 85.6 percent in fiscal year 2009. 

Office of the Inspector General 

the oIg performs audits and investigations of non-Irs and 

non-tarP treasury programs and operations. oIg audits result 

in recommendations to improve the effectiveness, efficiency, and 

integrity of treasury programs and operations. oIg investigators 

conduct a variety of investigations covering financial, corruption, and other crimes, as well as serious employee misconduct. 

the oIg dedicated nearly all audit resources to mandated work 

primarily related to material loss reviews of failed banks during 

the fiscal year. With the unprecedented number of treasuryregulated bank failures requiring a review, the oIg was unable 

to meet the performance goal of completing 100 percent of 

those audits by the statutory deadline. During fiscal year 2010, 

53 treasury-regulated banks failed of which 30 were supervised 

by occ and 23 by ots. by comparison, 27 treasury-regulated 

banks failed during fiscal year 2009. for fiscal year 2010, oIg 

had 18 required material loss reviews in progress at the start 

of the year, initiated 20 new material loss reviews during the 

year; and completed ten material loss reviews. through most 

of the fiscal year, material loss reviews were required when the 

bank failure caused a loss to the Deposit Insurance fund of 

$25 million or more. this threshold was recently increased to 

$200 million. as a new requirement, however, the oIg must 

perform a review of failures with losses under the threshold that 

is limited to determining (1) the grounds identified by occ or 

ots for appointing the fDIc as receiver and (2) whether any 

unusual circumstances exist that might warrant an in-depth 

review of the loss. for fiscal year 2010, the oIg initiated 33 

such reviews and completed six of them. for three of the six 

completed reviews, the oIg determined that there were unusual 

circumstances warranting in-depth reviews; those reviews were 

in progress at fiscal year end. for the other three reviews, the 

oIg determined that there were no unusual circumstances and 

therefore an in-depth review will not be performed. In addition, 

the office of Investigations initiated four criminal investigations 

of failed treasury banks as a result the office of audit’s findings. 

the oIg reported on a number of trends from its failed bank 

reviews. With respect to the causes of the failures, the oIg 

found overly aggressive growth strategies fueled by volatile 

and costly wholesale funding (e.g., brokered deposits, federal 

home loan bank loans, etc.); risky lending products such as 

option adjustable rate mortgages; unsound underwriting; high 

asset concentrations including high concentrations in cre 

loans; and inadequate bank risk management systems. the 

economic recession and the decline in the real estate market 

was also found to be a major factor in most failures. With 

respect to treasury’s supervision of the failed banks, the oIg 

found that regular and timely examinations were conducted and 

operational problems identified, but the regulators were slow 

to take timely and aggressive enforcement action. the oIg 

made numerous recommendations to both occ and ots to 

strengthen their bank supervision and examination programs. 

both occ and ots took timely and responsive actions to 

address the recommendations. 

strategic objective: enabled and effective treasury department 

part 2: annual performance report
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128 

although limited due to the oIg’s mandated workload, the 

oIg continued to provide oversight of treasury’s more than $20 

billion of non-Irs programs under the recovery act. these 

recovery act programs provide: (1) cash payments to businesses 

for partial reimbursement of energy projects; (2) funding to states 

for the development of low income housing; and (3) grants and 

tax credits for economic development activities administered 

through the cDfI fund. During fiscal year 2010, the oIg completed two reviews that were part of the recovery accountability 

and transparency board coordinated government-wide reviews. 

In the first review, the oIg identified potential weaknesses in the 

data prepared by the Department on staffing levels, qualifications, 

and training. In the second review, the oIg identified potential 

weaknesses in treasury’s processes for reviewing recipient data. 

for both reviews, the Department took responsive action to the 

oIg recommendations for improvement. 

In fiscal year 2010, the office of Investigations opened 100 new 

investigations and closed 74 investigations. oI also referred 

100 percent of investigations that substantiated administrative violations against a treasury employee to the appropriate 

regulated bureau for appropriate action. In addition, the office 

of Investigations referred 19 investigations for criminal prosecution to the Department of Justice. 

Treasury Inspector General for Tax 

Administration 

During fiscal year 2010, tIgta exceeded all of its performance 

measure targets. tIgta was responsible for successful investigations of entities and individuals who threatened the nation’s tax 

system and issued many high-profile audit reports that received 

considerable coverage by the media and others. cumulatively, 

these efforts resulted in $11.46 billion in potential financial 

benefits from audit recommendations and $230 million in potential savings from investigative recoveries in embezzlements, 

thefts, court order fines, penalties, and restitution. 

tIgta strives to protect the integrity of america’s tax system. 

tIgta’s audits focus on the economy, efficiency, and effectiveness of tax administration. overall, tIgta’s office of audit 

(oa) issued 129 reports (including 16 Defense contract 

audit agency reports), identifying over $11.46 billion in total 

potential financial benefits. these benefits included $2.8 billion 

in cost savings recommendations, $8.6 billion in potential 

increased revenue/revenue protected recommendations, $198 

thousand in taxpayer rights and entitlements recommendations, 

and $36 million in recommendations related to inefficient use of 

resources. these reports also included recommendations impacting over two million taxpayer accounts. 

tIgta office of Investigations (oI) investigates threats to 

america’s tax system, which could impede collection of tax 

revenue and reduce public confidence. overall, tIgta oI 

processed 9,513 complaints, resulting in 3,857 opened investigations. Vigilant work against extortion, bribery, contractor 

fraud and misconduct, theft, taxpayer abuses, false statements 

and financial fraud, and other criminal activity resulted in 

potential savings of over $230 million. eighty-seven percent of 

the 3,675 final closed investigations generated 1,625 cases of 

employee misconduct referred for action and 235 cases accepted 

for criminal prosecution. furthermore, since the april 1, 2009, 

inception of the armed escort Program, tIgta has conducted 

62 armed escorts. 

Recovery Act Audits 

the recovery act provided tIgta with $7 million for 

oversight and audits of Irs activities. tIgta has performed 

audits to ensure that Irs’s systems and programs are operating 

effectively, efficiently, and economically in their activities 

related to this legislation. tIgta’s fiscal year 2010 recovery 

act oversight Plan and final recovery act reports are posted to 

the tIgta area of the Recovery.Gov website. 

Security Clearance Modernization and 

Reporting Act of 2009 

tIgta reviewed the Security Clearance Modernization and 

Reporting Act of 2009, which would make changes to security 

clearance and suitability determination reporting and create a 

security clearance and suitability Performance accountability 

council. the bill specifies that membership of the council 

shall include a senior officer from the office of the Director of 

national Intelligence, the Department of Defense, and oPM, in 

addition to other members. tIgta provided comments on the 

bill, suggesting that the draft bill include a member of the Ig 

community on the council. tIgta will continue to monitor 

this bill for changes that may have an impact on its mission. 

Audit Related Accomplishments 

the mission of tIgta oa is to promote the sound administration of the nation’s tax laws by conducting comprehensive 

audits that advise congress, the secretary of the treasury, and 

Irs management of high-risk issues, problems, and deficiencies 

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performance and accountability report | fiscal year 2010 

129 

related to the administration of Irs programs and operations. 

fiscal year 2010 audit work resulted in significant recommendations to improve areas such as systems modernization, security 

maintenance, tax compliance, and operations, resulting in 

potential financial benefits. 

Inspections and Evaluations–Related 

Accomplishments 

During fiscal year 2010, tIgta’s office of Inspections and 

evaluations (I&e) provided responsive, timely, and costeffective inspections and evaluations of Irs challenge areas 

including recovery act implementation, pandemic influenza 

preparedness, and implementation of the Restructuring and 

Reform Act. the I&e staff also provided tIgta with additional 

flexibility and capability to provide value-added products and 

services for improving tax administration. 

Special Inspector General for the 

Troubled Asset Relief Program 

sIgtarP advances economic stability by promoting efficiency 

and effectiveness in treasury’s management of tarP through 

transparency, coordinated oversight, and robust enforcement 

against those who waste, steal, or abuse tarP funds. 

the american taxpayers have been asked to provide hundreds 

of billions of dollars to stabilize the financial system and 

promote economic recovery. In this context, they have a right 

to know how their money is being spent. Moreover, this same 

transparency is a powerful tool to ensure that all those managing 

tarP funds act appropriately, consistent with the law, and in 

the best interests of the country. sIgtarP’s primary tools for 

informing taxpayers about tarP are audit and quarterly reports, 

which are available for inspection at www.sigtarp.gov. 

additionally, sIgtarP ensures that members of congress are 

kept adequately and promptly informed of developments in 

tarP initiatives and of sIgtarP’s oversight activities. In that 

regard, the special Inspector general (sIg) and his staff regularly meet with and brief members of congress and their staff. 

sIgtarP also advises tarP managers concerning internal 

controls and the effectiveness of tarP activities, and makes 

recommendations for improvements in tarP management. 

sIgtarP closely coordinates its oversight activities with other 

tarP oversight bodies to ensure maximum coverage while 

avoiding redundancy and undue burden. In coordination with 

other oversight agencies, sIgtarP’s audit Division (aD) 

conducts and supervises performance audits and evaluations with 

respect to treasury’s operation of tarP; recipients’ compliance 

with their obligations under relevant law and contracts; and 

tarP policies and procedures. since its inception, sIgtarP 

has commenced 22 distinct audits and has issued 11 audit reports 

covering such topics as the use of tarP funds, external influence 

of programmatic decision-making, oversight of aIg’s compensation of executives, and treasury’s role in the decision to reduce 

the number of gM and chrysler dealerships. furthermore, among 

the policies and procedures that aD has reviewed and commented upon are tarP agreements and warrants, the Public-Private 

Investment Program, the capital assistance Program, and the 

home affordable Modification Program. 

sIgtarP’s Investigation Division (ID) supervises and conducts 

criminal and civil investigations into those persons and entities, inside or outside of government, who waste, steal, or abuse 

tarP funds. ID is comprised of experienced financial and 

corporate fraud investigators, special agents, forensic analysts 

and attorney advisors. this structure provides sIgtarP with a 

broad array of expertise and perspectives in developing sophisticated investigations. ID leverages its resources by coordinating 

closely with other law enforcement agencies and forming law 

enforcement partnerships and task force relationships across the 

federal government. ID has over 104 ongoing major criminal 

and civil investigations, and to date has prevented over $553 

million of tarP funds from being disbursed on the basis of 

fraudulent representations, and caused indictments of individuals 

for, among other offenses, bribery, embezzlement, bank fraud, 

mail fraud, wire fraud, and money laundering. ID also manages 

the sIgtarP hotline, which abides by all applicable whistleblower protections in processing complaints via telephone, 

e-mail, website, and in-person. ID has received and processed 

more than 14,000 hotline contacts since february 2009. 

Conclusion 

While over half of the measures for this goal were exceeded, 27 

percent of measures for this strategic goal were not met. treasury 

has opportunities for improving accountability and transparency across the organization and will continue to set aggressive 

targets for measures. 

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part 2: annual performance report
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130 

Moving Forward 

treasury’s three inspectors general will continue to provide 

oversight of the Department’s programs and operations. 

In fiscal year 2011, even with the increase to the threshold 

triggering a mandated review, oIg anticipates that it will 

be necessary to devote substantial resources to its statutory 

obligations related to the failures of treasury-regulated banks. 

oIg will also undertake work on new mandates such as those 

in the Dodd-frank act, such as overseeing the transfer ots’s 

functions to other banking regulators, as well as work required 

by the Improper Payments Elimination and Recovery Act of 2010. 

other high-priority areas where the oIg plans to focus its 

resources are on treasury’s non-Irs recovery act programs, the 

tftP, and significant capital investments like bsa modernization. oIg will also investigate (1) criminal matters involving 

recovery act funds, (2) matters where there was a subversion 

of the bank examination process by an ots or occ regulated 

bank, and (3) claims made against the fMs, check forgery 

Insurance fund. 

tIgta’s audits, investigations, inspections and evaluations 

priorities include: 

•	 overseeing the Irs’s efforts to administer tax provisions of 

the recovery act 

•	 Developing a multi-year oversight plan covering the Irs’s 

efforts to implement the various tax-related and health 

coverage tax credit-related provisions of the aca 

•	 conducting comprehensive audits, inspections, and evaluations that include recommendations for monetary benefits 

and enhancing the Irs’s service to taxpayers 

•	 adapting to the Irs’s continually evolving operations 

and mitigating intensified risks associated with modernization, security, addressing the tax gap, and human capital 

challenges facing the Irs in domestic and international 

operations 

•	 responding to domestic and international threats and 


attacks against Irs employees, property, and sensitive 


information
 

•	 Improving the integrity of Irs operations by detecting 

and deterring fraud, waste, abuse, and misconduct by Irs 

employees 

•	 Informing the public, congress, and the secretary of the 

treasury of problems and progress made to resolve identified issues 

sIgtarP intends to focus on increasing staff for field operations and to address increased workload in audits and investigations. the bureau will continue to promote transparency and 

prevent abuse in the tarP program. 

DasPtr will use leverage treasury’s ecM efforts towards its 

long term goal of improving productivity, increasing cost savings, providing user satisfaction, and improving response time to 

foIa requests. 

strategic goal: management and organizational excellence 

part 2: annual performance report