4 FAM 340
UNITED STATES TREASURY CHECKS
(CT:FIN-490; 02-29-2024)
(Office of Origin: CGFS/FPRA/FP)
4 FAM 341 GENERAL
4 FAM 341.1 Scope and Applicability
(CT:FIN-454; 08-07-2019)
a. Department of State personnel are designated by the Treasury Department as United States Disbursing Officers authorized to obtain, store, issue, report, verify, and cancel and reissue checks drawn on the U.S. Treasury (Treasury). This subchapter prescribes the requirements and forms for these operations with Treasury checks. The requirements apply to USDO operations abroad and at Washington disbursing operations serviced by Treasury Regional Financial Centers. Additional procedures related to Treasury checks issued by overseas disbursing operations are contained in 4 FAH-2, Disbursing Officer Handbook.
b. The requirements for depositary checks abroad appear in 4 FAM 350, U.S. Government Depositaries.
4 FAM 341.2 Authorities
(CT:FIN-454; 08-07-2019)
The authorities for this subchapter are as follows:
(1) 31 U.S.C. Chapters 33 and 35, General Authority to Issue Checks and Other Drafts;
(2) Treasury Financial Manual, Volume 1, Part 4-Chapter 5000, Requisitioning, Preparing and Issuing Treasury Checks; Chapter 6000, Checking Accounts with the U.S. Treasury; and Chapter 7000, Cancellations, Deposits and Claims for Checks Drawn on the U.S. Treasury;
(3) Public Law 100-86, Competitive Equality Banking Act of 1987; and
(4) 31 CFR Parts 235, 240, 245, and 248.
4 FAM 341.3 Definitions
(CT:FIN-454; 08-07-2019)
Agency location code (ALC): A 3-digit (Regional Finance Centers), 4-digit (Non-Treasury disbursing offices), or 8-digit (Treasury disbursing offices) identifier assigned by Treasury’s Bureau of the Fiscal Service (BFS) for reporting purposes.
Available check: A check that has not been paid by Treasury and is in the possession of the certifying or disbursing office.
Budget clearing account 19F3880: A clearing account established by Treasury for recording and adjusting credits and charges from the processing of claims on unavailable checks. ALC administrators are responsible for expeditiously clearing credits and charges in the Treasury account to the proper Department of State account.
Cancellation: The process of rendering a check nonnegotiable after it has been issued and repaying the amount of the check (whether available or unavailable) to an appropriation or fund account.
Check status inquiry: Department of State inquiry via the Treasury Check Information System (TCIS) concerning the payment status or to obtain a copy of a U.S. Government check.
Check symbols: The symbol numbers inscribed on the U.S. disbursing officer's (USDO) checks.
Chief disbursing officer (CDO): Treasury official who directs disbursing operations performed by the Treasury regional disbursing offices located throughout the United States.
Claimability: The length of time a payee can present a claim of nonreceipt, loss, or theft of a U.S. Government check.
Declined check: Any check presented for payment that Treasury will not honor because of a prior notice of a doubtful question of law or fact.
Disbursing officer (DO): An employee of the Federal Government, a Treasury DO (TDO) or non-Treasury DO (NTDO), authorized to perform financial transactions (deposit collections, disburse checks, and transfer funds between agencies). NTDOs located overseas also are referred to as USDOs and are authorized to disburse funds in both U.S. dollars and in foreign currency.
Due or entitled: The condition where the entire proceeds of a check are due and payable to a payee or the payee’s estate.
Holder-in-due-course: An individual who, in good faith, takes possession of a check through endorsement. A claim to payment by a holder-in-due-course will be honored, even if the original payee is not due or entitled to the check.
Limited payability cancellation: The process by which Treasury automatically cancels a government check that remains outstanding 12 months after the date of issuance.
Mutilated check: A check from which large portions are missing. Such check is treated as “unavailable” for cancellation purposes.
Nonreceipt: The payee alleges a check of entitlement was not received and requests a replacement check.
Not due or not entitled: The condition where all or part of the proceeds of a check are not due and payable to the payee or the payee’s estate.
Original check: The initially authorized physical check for which a claim of either nonreceipt, loss, theft, destruction, or mutilation has been received.
Outstanding status: A check is identified as outstanding when it has been reported as issued in TCIS but has not yet been paid.
Paid status: A check identified as paid that has been presented to the U.S. Treasury for payment through the banking system.
Payability: The length of time a U.S. Government check can be negotiated to a financial institution.
Recertified payment: A payment of a new numbered (not a substitute) replacement check issued to a recipient based on a claim of nonreceipt, loss, theft, destruction, or mutilation of an original check. Such payments may be vouchered at the disbursing office’s discretion at any point prior to or during the claims process. The check will be issued charging a valid Department of State appropriation.
Recovered check: A check returned to the possession of a Department of State certifying or disbursing officer after an unavailable check cancellation action has been taken.
Regional disbursing officer: Treasury employees who serve as “Directors” of regional offices throughout the United States and are authorized to disburse funds for other government agencies.
Status: The payment status of an issued check, whether outstanding or paid, according to Treasury records.
Treasury check information system (TCIS): TCIS records and reconciles U.S. Treasury payments and allows users to get claim status on automated clearing house (ACH) payments.
Treasury Financial Manual (TFM): The TFM is the Treasury's official publication of policies, procedures, and instructions concerning financial management in the Federal Government.
Unavailable check: A U.S. Treasury check not in the possession of a Department of State certifying or disbursing officer.
Unavailable check action: The action taken to:
(1) Determine the payment status of a check on which subsequent action will be based; and
(2) Initiate retrieval of a check photocopy via TCIS to obtain a copy of a check that has already been paid.
Undelivered check: A check that is in the possession of either a Department of State certifying or disbursing officer which has not been delivered to the payee.
4 FAM 341.4 Designation for Disbursing
4 FAM 341.4-1 U.S. Disbursing Officer (USDO)
(CT:FIN-454; 08-07-2019)
The Chief Disbursing Officer of the Treasury Department delegates disbursing authority to the Department of State in accordance with 31 U.S.C. 3321. Department of State U.S. citizen employees are assigned to CGFS Charleston or CGFS Bangkok and designated as a USDO by the Comptroller and Assistant Secretary, CGFS.
4 FAM 341.4-2 Assistant USDO Designation
(CT:FIN-454; 08-07-2019)
a. An assistant USDO may be designated and authorized to draw checks on the Treasury in the name of the USDO for whom the disbursements will be made.
b. The USDO, through the Director, Global Disbursing Operations, can request the Comptroller and Assistant Secretary, CGFS, to designate assistant USDOs. The assistant USDOs can act on behalf of the USDO during the USDO’s temporary absence or incapacity. Where circumstances warrant, assistant USDOs can actively assist the USDO in managing daily disbursing operations. Assistant USDOs perform the same duties and functions as the USDO.
4 FAM 342 CONTROLS AND USE OF TREASURY CHECKS
4 FAM 342.1 Management Controls
(CT:FIN-454; 08-07-2019)
This section is designed to comply with standards for a system of internal control as required by the Federal Managers’ Financial Integrity Act of 1982 (31 U.S.C. 3512(b)) and Competitive Equality Banking Act of 1987, Public Law 100-86. Control over disbursing and accounting functions as they relate to government check issuance and related activities must provide for achieving the proper conduct of Department of State business, full accountability for resources made available, and reviews to facilitate checks and balances against waste, fraud or abuse. Operating procedures and management control systems must reasonably ensure that the following objectives are achieved:
(1) Appropriate organizational plans must be provided to segregate functional responsibilities;
(2) Revenues and expenditures applicable to the Department’s financial operations must be properly recorded and accounted for to permit the preparation of reliable financial and statistical reports;
(3) Sound accounting practices must be exercised in the performance of duties; and
(4) Operational responsibilities must be commensurate with personnel qualifications.
4 FAM 342.2 Use, Issuance and Negotiability of Treasury Checks
4 FAM 342.2-1 Use of Treasury Checks
(CT:FIN-490; 02-29-2024)
a. Treasury checks will be used to pay obligations of the Department of State and serviced agencies; and to purchase U.S. dollars or foreign currency for disbursing purposes when payment cannot be made via electronic funds transfer. USDO checks will be drawn on the Treasury’s General account or on a designated depositary.
b. U.S. Treasury checks are prohibited from being sent to a foreign country from the United States, when it is determined that postal, transportation, or banking facilities do not reasonably ensure that the payee will receive the check or be able to negotiate it for full value.
c. See 4 FAM 311.5 for the Department’s policy on electronic funds transfer (EFT).
4 FAM 342.2-2 Issuance of Treasury Checks
(CT:FIN-454; 08-07-2019)
a. Check issue payments will be made on the basis of a certified voucher or Voucher and Schedule of Payments and carried-out in accordance with the policies established herein. The over-all check issuance process will be affected through use of management control procedures for financial operations and must not be reliant on USDO functions or the review and examination of vouchers.
b. U.S. Government checks carry the legend VOID AFTER 1 YEAR. The payee should return the expired check to the disbursing office that authorized the payment.
4 FAM 342.2-3 Negotiability of Treasury Checks
(CT:FIN-454; 08-07-2019)
All checks drawn on the Treasurer of the United States must be negotiated within 12 months after the date of issue. Treasury cancels U.S. Government checks that have not been negotiated 14 months after issue. Valid claims against checks canceled by Treasury may be re-submitted for certification and issuance of a check(s).
4 FAm 343 REQUISITIONING, PREPARING, AND MAINTAINING TREASURY CHECKS
4 FAM 343.1 USDO Manual Signature Specimens
(CT:FIN-454; 08-07-2019)
a. A newly designated USDO must forward specimens of their manual signature to Treasury, BFS prior to issuing any U.S. Government checks. A manual signature must show a reasonably uniform agreement with the standard signatures on file with Treasury. Any USDO who elects to change the form of their signature must submit new specimen signatures to Treasury, BFS.
b. A disbursing officer may designate an assistant disbursing officer to sign checks drawn on Treasury in the name of the disbursing officer. The disbursing officer forwards the original designation form and specimens of the assistant disbursing officer's manual signature to the agency official responsible for maintaining specimen signature files. An assistant USDO's signature must appear below the printed, typed, or stamped title of the disbursing officer for whom they are acting.
4 FAM 343.2 Facsimile Signatures
4 FAM 343.2-1 Authority for Use
(CT:FIN-454; 08-07-2019)
Where warranted, a USDO may request authority to use a facsimile signature. The request must be regarded as including an assurance, whether stated or not, that safeguards against unauthorized use of the facsimile signature are provided. In addition, the USDO must submit two certified and twelve plain specimen impressions from each signature plate for approval to Treasury, BFS. A notice of approval from Treasury must be in the USDO’S possession before any of the facsimile plates are used to sign checks. The plates must be numbered in sequence in the lower left corner beginning with the number “1” unless another system of identification is approved by Treasury. Alternate systems must assure control of the plates.
4 FAM 343.2-2 Internal Controls Over Facsimile Signatures
(CT:FIN-490; 02-29-2024)
a. Signature dies for machine or hand stamps which have become worn or have been withdrawn from service and which will not be used again must be destroyed in accordance with 4 FAH-2 H-216.2. Upon destruction, a “Certificate of Destruction” must be prepared. The certificate must be signed by two American U.S. Government employees who witnessed the destruction. An impression of the signature die must be made on the certificate prior to destruction. The original of the certificate must be sent to CGFS/DO and one copy of the certificate must be retained in the files of the USDO.
b. In the event a USDO’S service is terminated due to incapacitation or death, their successor must designate two American U.S. Government employees to serve as witnesses to the destruction of the predecessor’s signature die. The recommended methods of destruction include:
(1) Grinding the signature off by using a grinding wheel;
(2) Pouring rubber solvent on the signature of the die;
(3) Cutting or slicing the signature off the die with a razor blade or knife and then burning or cutting the signature into smaller pieces; or
(4) Removing the four screws from the die plate and cutting the combination rubber/brass die plate into smaller pieces.
The destruction must be sufficient to ensure that the die cannot be used for producing signatures. All signature dies, after being mutilated, must be disposed of as waste matter.
c. Refer to 4 FAH-2 H-216.1 for safeguarding facilities for facsimile signature plates.
d. The discovery of any theft, lost or misuse of facsimile signature plates must be promptly reported to the Office of Oversight and Management Analysis Directorate (CGFS/OMA) and the Office of Inspector General. CGFS/OMA must immediately notify the Treasury, BFS, Security Division, stating the USDO symbol involved and complete details of the theft or loss; and a request that payment be stopped on any USDO checks that may have been compromised.
4 FAM 343.3 Blank Treasury Checks
4 FAM 343.3-1 Annual Estimate of Requirements
(CT:FIN-454; 08-07-2019)
Each USDO submits an estimate of the number of blank U.S. Treasury checks required for the next calendar year when the reorder point is reached. The estimate is submitted utilizing U.S. GPO Form 2431, Print Order-Department of the Treasury Paper Checks and Proofs, including the following:
(1) USDO disbursing account symbol;
(2) Number of checks used in each of the three preceding months, i.e. January through March;
(3) Number of blank checks on hand; and
(4) The serial number of the highest numbered blank check on hand.
4 FAM 343.3-2 Supplemental Estimates
(CT:FIN-454; 08-07-2019)
The annual estimate of requirements for blank U.S. Treasury checks should be sufficient. In the event of unforeseen developments indicating the need for an additional supply of blank checks before the next check shipment is expected, the USDO promptly forwards a supplemental estimate of the additional requirements prepared in the same manner as the annual estimate.
4 FAM 343.3-3 Receipt and Acknowledgment of Shipments of Blank Treasury Checks by the USDO
(CT:FIN-454; 08-07-2019)
a. Upon receipt of a shipment of checks, the USDO compares the markings on the unopened packages with the notice of shipment. If no discrepancies are discovered, the receipt coupon provided with the notice is signed and filed in the Treasury Check Stock folder. Any discrepancy noted is reported immediately to Treasury, BFS.
b. Packages received with broken seals are promptly verified by the USDO. After verification, the package is closed, resealed, and the inclusive serial numbers of the checks found in the package indicated on the outside of the package over the signatures of the USDO and the verifying officer. Any discrepancies in the check serial numbers (or USDO disbursing account symbol) disclosed by the verification are reported immediately to the Chief Disbursing Officer, Treasury.
4 FAM 343.4 Custody and Control of Check Stocks
(CT:FIN-454; 08-07-2019)
USDO’s are responsible under the blanket bond for losses arising from the theft or misuse of blank checks; therefore, precautionary measures are prescribed for the custody and control of checks. The following sections must be executed.
4 FAM 343.4-1 Custody of Check Stocks
(CT:FIN-454; 08-07-2019)
a. Blank checks must be kept in a combination safe or comparable depositary, as prescribed in 4 FAH-2 H-215.
b. Blank checks must be stored in sealed packages until needed for use. Since checks are used in numerical sequence, only one package should be opened at a time.
c. Blank checks are withdrawn from stock only by the USDO or the designated USDO assigned check stock custodian.
4 FAM 343.4-2 Control of Check Stocks
(CT:FIN-454; 08-07-2019)
a. The USDO must maintain a perpetual inventory record of blank checks which reflects at all times the quantity (including serial numbers) of checks in stock in sealed packages, and the quantity and serial numbers of unwrapped checks on hand.
b. The inventory record must be verified by the USDO each quarter. Verification must include a physical inventory of sealed packages and unwrapped checks on hand. The verified checks inventory record must be signed by the USDO after necessary adjustment of any errors.
c. If at any time after its receipt and initial storage as provided in 4 FAM 343.3-3 an irregularity, such as a package of checks is found to have a broken seal, the contents indicated on the wrapper must be promptly verified by the USDO and one of the designated verifying officers. After verification, the package must be closed and resealed until a determination of investigation is completed. The inclusive numbers of the enclosed checks must be indicated on the package above the signatures of the USDO and the verifying officer.
d. Upon a change of USDO, or upon the assumption of responsibility by the assistant USDO for a period expected to exceed 1 month, the two officers jointly verify the blank check inventory record.
e. The USDO must maintain the blank check inventory records for authorized inspection at any time.
4 FAM 343.4-3 Missing Check Stocks
(CT:FIN-454; 08-07-2019)
Any shortage, theft, or misuse of blank checks discovered at any time is promptly reported to the Treasury, BFS, Security Division, at (304) 480-7777. The Treasury should be provided with the check numbers and USDO disbursing account symbol involved and request that payment be stopped. Complete details of the shortage, theft, or misuse are then reported immediately to the Department, Attention: Managing Director, Disbursing Operations, CGFS/DO.
4 FAM 343.5 Inscribing Treasury Checks
(CT:FIN-454; 08-07-2019)
Efficient controls must be exercised over U.S. Treasury checks while in the process of preparation. The controls must be designed for protection against loss or theft, to prevent the release of imperfect checks and for prompt disclosure of any discrepancy. Inscription machinery must be selected upon the basis of its capability to draw checks.
4 FAM 343.6 Signature of USDO
(CT:FIN-454; 08-07-2019)
Each U.S. Treasury check issued by a USDO will bear either:
(1) Manual signature;
(2) Approved facsimile signature; or
(3) Manual signature of an officially designated assistant USDO.
4 FAM 344 ISSUING TREASURY CHECKS
4 FAM 344.1 Reporting Requirements
(CT:FIN-454; 08-07-2019)
USDOs must report their detailed check-issue transmittals using Connect:Direct or on level 8 magnetic tape. Treasury's preferred method of reporting is Connect:Direct. USDOs should report via magnetic tape only if reporting via Connect:Direct is not possible (refer to disbursing user’s manual for procedures).
4 FAM 344.2 Voided Checks
(CT:FIN-454; 08-07-2019)
a. All voided checks must be rendered nonnegotiable by placing the legend “VOID—NOT NEGOTIABLE, NO CHECK ISSUED UNDER THIS NUMBER” on the face of the checks.
b. The voided checks must be defaced and listed according to symbol and “from and to” serial numbers. The listing of voided checks must be reported to Treasury on Form SF-1179, Month End Check Issue Summary, at the end of the issue month.
4 FAM 345 ENDORSEMENT AND PAYMENT OF CHECKS
(CT:FIN-454; 08-07-2019)
The Treasury has the right of reasonable time for examination of drawee checks presented, to refuse payment of refer doubtful claims against checks to the Government Accountability Office for settlement. Checks are deemed to be paid by Treasury only after the first fully completed examination.
4 FAM 345.1 Endorsements
4 FAM 345.1-1 U.S. Government Payee Endorsements
(CT:FIN-454; 08-07-2019)
The Federal Reserve Board regulates checks endorsement standards in Regulation CC: Part 229 - Availability of Funds and Collection of Checks. Additional Department check endorsement standards follow:
(1) Specific information must be included on stamps used on the back of all checks deposited by Cashiers. For example;
PAY ANY BANK
USDO Symbol—
Cashier Code Symbol
Embassy Name
Bank Name of Treasury General A/C;
(2) Payees depositing checks with Federal Reserve Banks or commercial depositaries must utilize the endorsement area located 1.5 inches beginning at the trailing edge of the check; and
(3) The depositary bank will place its endorsement in the area beginning 3.0 inches from the leading edge and ending 1.5 inches from the trailing edge of the check.
4 FAM 345.1-2 Acceptable Endorsement
(CT:FIN-454; 08-07-2019)
a. The only acceptable endorsement of a check by one other than the payee is that the person endorsing is doing so on behalf of the named payee. Such an endorsement will include the signature of the endorser with sufficient wording indicating that the endorsement is on behalf of the named payee.
b. Checks endorsed for “collection” or “deposit only” to the credit of the named payee are acceptable without any signature. In the absence of a signature, the presenting bank will be responsible for the guarantee of such checks to all subsequent endorsers and to the Treasury.
4 FAM 345.1-3 Unacceptable Endorsement
(CT:FIN-454; 08-07-2019)
Endorsements by other than the payee signature, regardless of the relationship between the payee and endorser, must be presumed to be a forgery and are unacceptable for payment by Treasury. It is the responsibility of the individual or institution accepting a check from a person other than the named payee to determine that such person is authorized and has the capacity to endorse and negotiate the check. Treasury may require evidence of such claimed activity in the event of a dispute.
4 FAM 345.1-4 Endorsement by Financial Institutions
(CT:FIN-454; 08-07-2019)
a. U.S. Treasury checks endorsed by a payee and received by a financial institution for credit to a specific account may be endorsed CREDIT TO THE ACCOUNT OF THE WITHIN-NAMED PAYEE.”
b. Financial institutions receiving and endorsing checks must comply with the established Federal Reserve Board standards for endorsement during the collection and return process (see 4 FAM 345.1-1).
4 FAM 345.2 Checks Issued to Incompetent, Deceased or Minor Payees
4 FAM 345.2-1 Checks Issued to Incompetent Payees
(CT:FIN-454; 08-07-2019)
U.S. Treasury checks endorsed by legal guardians for persons declared incompetent must include a statement as to the capacity in which they are endorsing the check. The checks will be paid by Treasury without submission of documentary proof of authority. Treasury may require evidence of such claimed authority to endorse in the event of a dispute.
4 FAM 345.2-2 Checks Issued to Deceased Payees
(CT:FIN-454; 08-07-2019)
a. The right to payment of Treasury checks does not terminate with the death of a payee when endorsed by an executor or administrator. An indication of the capacity in which the executor or administrator is endorsing must be included as part of the endorsement.
b. Treasury checks other than those issued in payment for redemption of currencies, principal, or interest on U.S. securities, tax refunds and for goods and services may not be negotiated after the death of the payee. The checks are to be returned to the issuing disbursing office. A determination must be made whether payment is due and to whom it may be made.
4 FAM 345.2-3 Checks Issued to Minor Payees
(CT:FIN-490; 02-29-2024)
Checks issued to minors may be endorsed by either parent with whom the minor resides; or, if the minor does not reside with either parent, by the person who furnishes their chief support. The person endorsing on behalf of the minor must present with the check, a signed statement indicating the minor’s age, residence, means of chief support and that proceeds of the check will be used for the minor’s benefit.
4 FAM 345.3 Power of Attorney
(CT:FIN-454; 08-07-2019)
U.S. Treasury checks endorsed by an attorney-in-fact must include, as part of the endorsement, proof or indication to which the attorney is endorsing. The checks will be paid by Treasury without the submission of documentation of the claimed authority, with the understanding that evidence may be required in the event of a dispute.
4 FAM 345.4 Guaranty of Endorsements
(CT:FIN-454; 08-07-2019)
The bank and the endorser of a check presented to Treasury for payment must guarantee that all endorsements are genuine. When the first endorsement on the check has been made by one other than the payee, the presenting bank and the endorser must guarantee to Treasury that the endorsing person had authority to do so on behalf of the payee.
4 FAM 346 LIMITED PAYABILITY OF GOVERNMENT CHECKS
4 FAM 346.1 Limited Payability Proceeds
(CT:FIN-454; 08-07-2019)
a. Payees of U.S. Treasury checks have 1 year from the date of issue to negotiate the check. Government checks that remain uncashed after 12 months must be voided by Treasury and legally cannot be negotiated by a financial institution. Treasury will automatically cancel all limited payability checks 14 months after the issuance date.
b. The proceeds realized from worldwide limited payability cancellations are placed in the budget clearing account F3880, Unavailable Check Cancellations and Overpayments, and returned monthly by Treasury, BFS via the Central Accounting Reporting System (CARS) to the Office of the Managing Director, CGFS/F.
c. CGFS/F must maintain strict management controls and accountability over limited payability proceeds. Managerial controls must include reviews, reconciliations, and the dissemination of transactions by Agency Location Code (ALC) and checking account symbol. Transactions are forwarded to each benefiting disbursing operation for processing.
4 FAM 346.2 Processing Limited Payability Transactions
(CT:FIN-454; 08-07-2019)
a. Within 30 days after receipt, benefiting disbursing operations must identify and classify detailed transactions (credits). Limited payability transactions are returned to the original appropriation and/or allotment from which made. A subsequent reversing entry must be made to the budget clearing account F3880.
b. Transactions (credits) which cannot immediately be identified will remain in the appropriate budget clearing account identified by ALC or checking account symbol.
c. Transactions which constitute valid liabilities will be treated as accounts payable. Transactions identified as invalid liabilities such as a duplicate payment will be deobligated immediately, and funds made available to the applicable appropriation or returned to surplus under normal year-end procedures.
d. Transactions identified as valid liabilities and a claim not presented within 5 years from the date of a check will be returned to Treasury through submission of the Year-end Closing Statement. Claims presented after the funds have been returned must be restored through the normal restoration process.
e. The validity of an available or unavailable check claim by a payee must be exercised through examination of the payment records to determine whether an earlier claim or check cancellation was processed. When examination of the records is inconclusive, a request for Treasury check status inquiry must be used to support payment or nonpayment of cancellation claims.
4 FAM 346.3 Management Controls
(CT:FIN-454; 08-07-2019)
a. Accounting managers must determine the efficiency and effectiveness with which proceeds from limited payability check cancellations are applied to appropriated and nonappropriated funds, and payee claims are processed against the proceeds. Findings must be appraised and utilized for the purpose of refining and improving procedures or internal control features of limited payability and claimability of U.S. Treasury check procedures.
b. Managers of the budget clearing account F3880 are responsible for an ongoing transaction analysis to determine the status of limited payability proceeds. Action must be initiated to clear balances that have been held in the accounts for more than 1 year. Unidentified limited payability transactions (credits) which remain in the budget clearing account F3880 for more than 1 year must be transferred to Treasury account 20X6133, Payment of Unclaimed Moneys.
4 FAM 346.4 Treasury Charges
(CT:FIN-454; 08-07-2019)
a. The Department’s ALCs will be charged by Treasury for:
(1) Copy/information retrieval;
(2) Computer processing activities related to archiving and retrieval;
(3) A percentage of the overall check payments and reconciliation processing;
(4) Microfilm production;
(5) Postage fees; and
(6) Record storage.
Anticipated costs will be determined and billed by Treasury at the end of each fiscal year, and the costs will be based on the volume of requests.
b. Costs for record storage charges must be billed on a fiscal year basis. Copy retrieval costs must be billed quarterly. Charges for copy requests must be re-evaluated at the end of the third quarter of each fiscal year and will be based on the number of requests processed during the current fiscal year. Treasury will advise the Department on the copy request charge for the following fiscal year with the third-quarter billing statement.
4 FAM 346.5 Forgery and Fraud
4 FAM 346.5-1 Forgery and Fraud Referral
(CT:FIN-454; 08-07-2019)
a. The United States Secret Service will perform an investigation on a case-by-case basis when forgery or fraud is indicated. A single case referral must total more than $25,000 in forged or fraudulent issued checks. Cases which cannot be handled according to TFM, Volume 1, Part 4, Section 8070, may be referred by a USDO to the Secret Service, 1800 G Street, NW, Washington, DC 20223, for investigation.
b. Valid claims or replacement checks are paid in accordance with TFM, Volume 1, Part 4, Section 8070.
4 FAM 346.5-2 Check Forgery Insurance Fund
(CT:FIN-454; 08-07-2019)
a. The Treasury, in accordance with TFM, Volume 1, Part 4, Section 8070, must pay from the “Check Forgery Insurance Fund” to a payee or special endorsee of a check drawn on a depositary designated by Treasury, the amount of the check without interest if:
(1) The check was lost or stolen through no fault of the payee;
(2) The check was negotiated and paid by Treasury on a forged endorsement; or
(3) The payee was not involved in any part of the proceeds of the check negotiation or payment.
b. Treasury is responsible for depositing to the credit of the “Check Forgery Insurance Fund” any amount recovered from a forger.
4 FAM 346.5-3 Limitation on Reclamation Actions and Claims (Fraud)
(CT:FIN-454; 08-07-2019)
U.S. Treasury checks paid over a forged or unauthorized endorsement may be reclaimed from the presenting bank or any other endorser that has breached its guarantee prior to:
(1) The end of the 1-year period beginning on the date of payment; or
(2) The expiration of the 180-day period beginning on the close of the 1-year period.
4 FAM 346.5-4 Processing Government Checks
(CT:FIN-454; 08-07-2019)
a. Federal Reserve Banks may cash Treasury checks drawn on the order of USDOs. USDO checks are not refused for payment unless they have been altered or forged.
b. Each Federal Reserve Bank will charge the amount of checks cashed to the account of the Treasury. Any check that Treasury refuses to pay will be photocopied and returned to the Federal Reserve Bank. A reversal of the previously charged amount must be credited to Treasury’s account for the refused payment.
c. Banks located outside of the United States which are designated as depositaries and permitted to charge checks to Treasury’s General Account are governed by operating instructions contained in a letter of authorization issued by the Treasury. Depositaries are responsible for assuming the obligation of presenting banks.
4 FAM 346.5-5 Collection for Unauthorized Endorsements
(CT:FIN-454; 08-07-2019)
a. A check paid by Treasury and later found to bear an unauthorized endorsement must be refunded by the presenting bank. Treasury will have the right to recover interest and other applicable charges such as administrative collection costs and late payment penalties that may be authorized or required by law.
b. Treasury will issue an initial demand for refund of the amount of a check payment by sending a “Request for Refund Reclamation” to the presenting bank. The “request” will advise the presenting bank of the amount and the reason for the demand.
c. A protest of Treasury’s demand for refund, by the presenting bank, must be received in Treasury no later than 90 days after the reclamation date. Collection action will be delayed while the protest is being considered. If Treasury accepts the protest, the presenting bank must be notified in writing that efforts to collect the item and any accrued interest have been abandoned.
d. Presenting banks will be notified in writing, of insufficient evidence in the protest. Treasury requires the presenting bank to bear liability for the amount of the demand. If the demanded amount is not paid by the presenting bank within 30 days of the date of decision, Treasury will proceed to collect the amount owed by offset.
e. Treasury will promptly refund any amount offset to a banking institution when it has been determined that the bank was not liable for an unauthorized endorsement.
4 FAM 347 CANCELING, DEPOSITING AND CLAIMS FOR U.S. GOVERNMENT CHECKS
4 FAM 347.1 Cancellation of Checks
4 FAM 347.1-1 Cancellation of Available Checks
(CT:FIN-454; 08-07-2019)
a. All available checks whether due or not due the payee or the payee’s estate, must automatically be canceled by the USDO within 24 hours of receipt.
b. The following legend should be inscribed on the face of the check(s) to be canceled: “NOT NEGOTIABLE—For payment and credit in the U.S. Treasury Account, Checking Account Symbol XXXX.”
c. Available checks which are in the possession of a USDO must be canceled within 24 hours of receipt. Form SF-1098, Schedule of Canceled or Undelivered Checks, will be used to initiate the cancellation.
4 FAM 347.1-2 Cancellation of Unavailable Checks
(CT:FIN-454; 08-07-2019)
a. USDOs will take immediate steps to stop payment by means of TCIS on any check that has been issued but is unavailable when it is learned that the payee or payee’s estate is not entitled to all, or part of the proceeds of the check. The USDO must ascertain the disposition of the check and issue a notice to the payee or payee’s estate that such checks are not to be negotiated but returned to the USDO for proper handling.
b. A valid claim against any part of the proceeds owed a payee or payee’s estate may be rescheduled and a new check issued. A copy of any check paid prior to the recording of the stop payment, will be forwarded to the USDO by Treasury.
c. The following steps will be taken when checks are presented for payment after the request for stop payment has been received and the “stop” entered by Treasury:
(1) Treasury will decline payment if the payee is deceased; and
(2) If it becomes necessary that Treasury honor a claim of a holder-in-due-course, the check will be paid and the credit that was allowed when the check was previously treated as canceled will be reversed by means of FMS 3858, Claims Document. Payments over cancellation are reported via IPAC.
4 FAM 347.2 Nonreceipt or Loss
(CT:FIN-454; 08-07-2019)
A payee of nonreceipt, loss, or a mutilated check drawn on the Treasury will immediately notify the USDO or FMC and request that payment be stopped. If the check is determined to be outstanding, the claimant will be issued a substitute check.
4 FAM 347.2-1 Substitute Checks
(CT:FIN-454; 08-07-2019)
a. A substitute check issued in lieu of lost, stolen, or mutilation must not be canceled and deposited as the original check. A substitute check which is returned because the original has been reported recovered by the payee should be stamped with the legend “NOT NEGOTIABLE—ORIGINAL RECOVERED” and together with any correspondence are forwarded for removal of stop payment on the original check to the CDO, Treasury.
b. Substitute checks returned to Treasury for reasons other than the recovery of the original check by the payee will be stamped with the legend “NOT NEGOTIATED—UNDELIVERED.” This group of substitute checks should be separately packaged, from those being forwarded for the purpose of removing stop payment on the original checks, and sent to the Treasury, BFS.
4 FAM 347.2-2 Recovered Checks
(CT:FIN-454; 08-07-2019)
a. Checks recovered subsequent to treatment as unavailable cancellations or returned to the possession of the USDO succeeding submission of “Unavailable Check Cancellation” must not be canceled, deposited or released to the payee.
b. Checks for which Form SF-1184, Unavailable Check Cancellation, was previously submitted, are to be stamped “NONNEGOTIABLE, PREVIOUSLY TREATED AS CANCELED.” The date of the previous Form SF-1184 must be forwarded to Treasury along with the checks.
4 FAM 347.2-3 Request for Stop Payment
(CT:FIN-454; 08-07-2019)
The USDO must access TCIS for the purpose of placing stoppage of payment when a claim of nonreceipt, loss, theft, destruction, or mutilation of a check is received.
4 FAM 347.3 Depositing, Accounting and Reporting for Canceled Checks Proceeds
4 FAM 347.3-1 Depositing Canceled Checks
(CT:FIN-454; 08-07-2019)
Checks held may be transmitted to the depositary covered by Form SF-215, Deposit Ticket. The deposit ticket must have a confirmed date. Deposits must be made in advance of the close of the month to facilitate their being taken into accounts in the same month as the deposit. Canceled miscellaneous payment checks issued by Treasury must be deposited at the earliest date a workable volume is on hand, but not prior to the issue date of the checks. Check cancellations for which immediate credit has been requested must be deposited immediately.
4 FAM 347.3-2 Accounting and Reporting for Canceled Checks
(CT:FIN-454; 08-07-2019)
a. Accounting transactions for canceled checks associated with Washington-held allotment programs must be reported as reductions in disbursements on the monthly Statement of Transactions (Classified According To Appropriation, Fund and Receipt Account, and Related Control Totals). Treasury control totals disbursements report, will be reduced by the amount of the deposits.
b. The USDO will report applicable transactions as confirmed deposits on the monthly Statement of Accountability (Foreign Service Account) and as reductions in disbursements on the monthly Statement of Transactions According To Appropriations, Funds, and Receipt Accounts (Foreign Service Account). Refer to disbursing user’s manual for operating procedures.
4 FAM 347.3-3 Proceeds from Canceled Checks
(CT:FIN-454; 08-07-2019)
a. Canceled check proceeds will be returned to the account originally charged or the appropriate successor account. A check related to annual, multi-year and no-year appropriations will be treated as an account payable. An invalid liability would be available to the account or returned to surplus under normal year-end procedures. Proceeds from a check which constitute a valid liability, but a claim has not been presented within 5 years from the date of issue, must be returned to Treasury through the Year-end Closing Statement. Funds must be restored through the restoration process when a claim is placed after the proceeds of a check are returned.
b. The Department will be responsible for initiating action to clear balances that have been held in uninvested trust, revolving and deposit fund accounts for more than 1 year for transfer to account 20X6133. Such balances must meet all four of the following criteria:
(1) Amount is $25.00 or more;
(2) A refund upon claim would be justified;
(3) There is no doubt as to the legal ownership of the funds; and
(4) A named individual, business, or other entity can be identified with the item.
c. Invested accounts will retain funds from canceled checks on their books. All records necessary to recertify any payment on an obligation represented by a canceled check must be retained by the disbursing office.
d. Proceeds returned due to check cancellation may not be used to create new obligations except where the liability is determined not valid. The use of the funds must be in strict compliance with laws governing appropriated funds.
4 FAM 348 UNDELIVERED U.S. TREASURY CHECKS
(CT:FIN-454; 08-07-2019)
The following procedures are to be followed when the Department is granted a waiver to cancel undelivered checks and will:
(1) Facilitate the safekeeping of the checks;
(2) Place the amounts of the checks under appropriate accounting control at the earliest practicable date; and
(3) Eliminate the checks as continuing payables in USDO accounts.
4 FAM 348.1 Request for Waiver
4 FAM 348.1-1 Safekeeping Undelivered Checks
(CT:FIN-454; 08-07-2019)
Each disbursing operation must prescribe procedures to be observed for the safekeeping of checks returned as undelivered. Checks must be kept in a locked combination safe while in the custody of the USDO.
4 FAM 348.1-2 Time Limit for Holding Undelivered Checks
(CT:FIN-454; 08-07-2019)
a. Undelivered checks may be held a maximum of 6 months after the month of issue. An earlier disposition is operationally beneficial to the USDO and Treasury for check payment and checking account reconciliation. Undelivered checks should be deposited as soon as practicable. Deposits must be made in time to be confirmed and recorded in the same accounting month that the disbursing activity is to be reported. Undelivered checks for which no action has been taken to authorize disposition within the time limit will be deposited by Treasury, for credit to the Department’s 8-digit ALC or 4-digit disbursing account symbol.
b. Undelivered checks returned to Treasury without a claim, will be forwarded within 5 days after receipt to the appropriate USDO for disposition. The benefiting USDO should determine whether the proceeds of the check are due or not due the payee or the payee’s estate.
4 FAM 348.2 Schedule of Canceled or Undelivered Checks
(CT:FIN-454; 08-07-2019)
a. Form SF-1098 must be used to schedule canceled or undelivered checks, the proceeds of which are due and payable to the payee or payee’s estate. The proceeds must be credited to the appropriation or fund account from which they were originally certified. If the account cannot be determined, the credit should be made to F3875 “Budgetary Clearing and Suspense Account” until the determination can be made.
b. Liability will be established immediately in the accounting records for the amount of all undelivered checks credited in order to provide for the possible subsequent payment to the payees or their estates upon claim for the proceeds. This liability represents an unpaid obligation. Either Form SF-1098 or the regular formal documentation may be used to establish the obligation and payable in the accounts.
4 FAM 348.3 Undelivered Check Claims
4 FAM 348.3-1 Claims for Undelivered Checks Not Automatically Canceled
(CT:FIN-454; 08-07-2019)
Undelivered checks which are returned to the USDO or Treasury and are determined to be due and payable to the payee, or the payee’s estate or guardian, are subject to claims for their proceeds. Claims may be received prior to the return of the check, with the returned check, while the check is being held by the USDO, or at any future date.
4 FAM 348.3-2 Claims for Proceeds of Undelivered Checks
(CT:FIN-454; 08-07-2019)
Valid claims for the proceeds of undelivered checks which have been credited to the Department’s accounts must be recertified for payment.
4 FAM 348.3-3 Claims Involving Deceased or Incompetent Payees
(CT:FIN-454; 08-07-2019)
a. Undelivered checks submitted to a disbursing office in connection with a claim for the proceeds which are due a deceased payee or an estate, or an incompetent individual, must be scheduled for deposit and applied as a credit to the appropriation or fund account originally charged; and at the same time, establishing a liability for payment.
b. Claims involving deceased civilian or military personnel of the Government and deceased or incompetent public creditors as well as claims involving doubtful questions of law or fact must be settled by the U.S. Government Accountability Office.
4 FAM 348.4 Vouchering Claims for Proceeds of Undelivered Checks
(CT:FIN-454; 08-07-2019)
In processing claims for the proceeds of undelivered checks which have been credited to Departmental accounts, the payment must be supported by a regular disbursement voucher signed by an authorized certifying officer.
4 FAM 349 RECORD OF CHECKS DEPOSITED
4 FAM 349.1 Endorsement and Legend
4 FAM 349.1-1 Depositor’s Endorsement on Checks Deposited
(CT:FIN-454; 08-07-2019)
a. Endorsements by depositors of checks, including checks drawn to the order of Treasury, for deposit with the Federal Reserve banks and general depositaries for credit in the account of Treasury should include:
(1) The USDO disbursing account symbol number, or the Agency Location Code (ALC);
(2) The words, “FOR CREDIT TO THE U.S. TREASURY”; and
(3) The date of endorsement.
b. Depositors must show in the endorsement on checks the same ALC as shown on Form SF-215.
c. When depositors can determine from other records the date each check is deposited, the date in the endorsement may be eliminated. Such endorsement in form or content changes, for any reason, must first be approved by Treasury.
4 FAM 349.1-2 Legend Placed on Checks Scheduled for Deposit
(CT:FIN-454; 08-07-2019)
The back of each undelivered check scheduled for deposit will be stamped “Deposit to ALC xxx” before any action is taken to deposit the checks.
4 FAM 349.2 Check Deposits
4 FAM 349.2-1 Federal Reserve Bank Deposits
(CT:FIN-454; 08-07-2019)
a. Checks deposited with a Federal Reserve Bank need not be sorted but must be accompanied by an adding machine tape or other listing showing the item amounts and deposit total. The Federal Reserve Bank will credit Treasury’s General Account on the date of the deposit if the items are received early enough to be processed that day. Department of State depositors must establish a schedule allowing the deposits to reach the Federal Reserve Banks before the daily deadline for Government agency deposits.
b. Treasury checks exceeding $5,000 must be deposited with the nearest Federal Reserve Bank. Form SF-215 must be prepared and transmitted with the checks.
4 FAM 349.2-2 Depositing Canceled Available and Undelivered Checks
(CT:FIN-454; 08-07-2019)
Available and undelivered U.S. Treasury checks which have been scheduled for cancellation or deposit on Form SF-1098 are classified as repayments and should not be included in deposits of other classes of collection items.