4 FAM 420
VOUCHER EXAMINATION
(CT:FIN-481; 01-05-2022)
(Office of Origin: CGFS/FPRA/FP)
4 FAM 421 GENERAL
(CT:FIN-463; 04-19-2021)
a. This subchapter provides the Department’s requirements for processing vouchers from the receipt of invoices through the approval and prepayment examination stages. It also provides guidance for scanning documents used to support payments.
b. There are a number of roles and responsibilities associated with voucher payments that must be separated to ensure payments are appropriate and properly executed (see 4 FAM 022). Essentially, obligations are generated for goods and services, the goods and services are received, accepted, and documented via various methods, invoices or other claims for payments are received by the designated billing office, supporting documentation is approved and undergoes a prepayment examination, vouchers are created to support payments, and vouchered amounts are certified prior to releasing a payment to the vendor or claimant. Invoices must be paid in accordance with the Prompt Payment Act.
4 FAM 422 INVOICE requirements for voucher paymentS
(CT:FIN-463; 04-19-2021)
An invoice from the claimant is normally required for the processing of a payment to a vendor (e.g., store, contractor, etc.). The format, content, submission location, and submission process must be acceptable to the Department as outlined in obligating documents or agreements (e.g., contracts, purchase orders, bilateral agreements, etc.).
4 FAM 422.1 Prompt Payment Act
4 FAM 422.1-1 Definitions Prescribed by 5 CFR 1315 for Implementation of the Prompt Payment Act
(CT:FIN-463; 04-19-2021)
Accelerated payment: Payment made prior to the due date per 5 CFR Part 1315.5 and Office of Management and Budget Executive policy directives for small businesses M-11-32.
Acceptance: An acknowledgment by an authorized Government official that goods received and services rendered conform to the contract requirements. Acceptance also applies to partial deliveries.
Banking information: Information that is necessary to facilitate an electronic funds transfer (EFT) payment, such as the vendor’s bank account number, the vendor’s financial institution’s routing number, and the vendor’s financial institution address.
Date of receipt of invoice: Prompt payment regulations require that an invoice is deemed to be received on the later of:
(1) Receipt date: For invoices that are mailed, the date a proper invoice is actually received by the designated billing office. For invoices electronically transmitted, the date a readable transmission is received by the designated billing office, or the next business day if received after normal working hours. If the agency fails to annotate an invoice with the date of receipt of the invoice, the date placed on the invoice by the contractor is used; or
(2) Delivery date: The date in which goods are actually delivered or performance of the services is actually completed and when the contract specifies that the delivery ticket may serve as an invoice; or
(3) Acceptance date: The date the agency accepts the goods or services. This date cannot exceed seven days after the date in which goods are actually delivered or performance of the services is actually completed unless a longer acceptance period is specified in the contract.
Discount: An invoice payment reduction offered by the vendor for early payment or compliance with terms cited in the contract or award document.
Discount date: The date by which, if payment is made, a specified discount can be taken.
Due date: Unless otherwise specified, 5 CFR Part 1315.4(g) of the Prompt Payment implementing regulations states that payment is to be made either:
(1) On the date(s) specified in the contract;
(2) In accordance with discount terms when discounts are offered and taken;
(3) In accordance with accelerated payment methods; or
(4) No later than thirty days from the date of receipt of a proper invoice (see Definition for date of receipt of invoice), if not specified in the contract, if discounts are not taken, and if accelerated payment methods are not used.
Prompt Payment Act penalties cease when a vendor’s financial information is invalid or missing from the Central Contractor Registration (CCR). Payment is suspended until this information is corrected by the vendor. According to 5 CFR Part 1315.10 (8), if the banking information supplied by the vendor is incorrect, interest under this regulation will not accrue until seven days after such correct information is received.
Electronic funds transfer (EFT): Any transfer of funds, other than a transaction originated by cash, check, or similar paper instrument that is initiated through an electronic terminal, telephone, computer, or magnetic tape, for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit an account. The term includes, but is not limited to, Automated Clearing House and Fedwire transfers.
Fast payment: A procedure under the Federal Acquisition Regulation at Part 13.4 which allows payment under limited conditions to a vendor prior to the U.S. Government’s verification that supplies have been received and accepted.
Invoice: A bill, written document, or an electronically transmitted document, such as a facsimile copy, scanned copy, email copy, or electronic data interchange, provided by a vendor requesting payment for goods received or services rendered. A proper invoice or an electronically transmitted document must meet the requirements of the Prompt Payment Act. The term invoice also includes a receiving report and delivery tickets when contractually designated as invoices.
Payment date: The date on the check for payment or the date of an electronic funds transfer (EFT) payment (settlement date).
Prompt pay interest penalty rate: The rate established by the Secretary of Treasury for payment of invoices after the due date. The interest rate is published semiannually by the Fiscal Service, Department of Treasury, in Federal Register on or about January 1 and July 1. For more information, see Prompt Payment: Interest Rates.
Proper invoice: A bill, received in hard copy or by electronic transmission, provided by a vendor requesting payment for goods received or services rendered. Department policy implementing the Prompt Payment Act as set forth in 5 CFR Part 1315.9(b) allows the term “invoice” to include receiving reports and delivery tickets when contractually designated as invoices. Department policy requires an invoice, voucher, or other approved billing document to comply with the following:
(1) Name of vendor;
(2) Invoice date;
(3) Government purchase order, contract number, or other authorization for the delivery of goods and services;
(4) Vendor invoice number, account number, and/or any other identifying number agreed to in the contract;
(5) Description (including, for example, contract line/subline number), price, and quantity of goods and services ordered and received;
(6) Shipping and payment terms (unless mutually agreed that this information is only required in the contract);
(7) Taxpayer Identifying Number (TIN), unless agency procedures provide otherwise;
(8) Banking information, unless agency procedures provide otherwise, or except in situations where the EFT requirement is waived under 31 CFR 208.4;
(9) Contract name (where practicable), title and telephone number; and
(10) Other substantiating documentation or information required by the contract.
Rebate: A monetary incentive offered to the government by government-wide commercial bank card issuers to pay bank card invoices early.
Receiving office: An entity which physically receives the goods or services and may be separate from the accepting entity.
Receiving report: Written or electronic evidence of receipt and acceptance of goods or services by a government official. Receiving reports must meet the requirements of 5 CFR Part 1315.9(c). This requirement includes the date(s) goods and services were received and accepted as well as the signature (or electronic alternative), printed name, and contact information (e.g., telephone number, email address, etc.) of the receiving official.
Recurring payments: Payments for services of a recurring nature such as rents, building maintenance, transportation services, parking leases, and maintenance for equipment, Internet and cellular phones, etc. They are performed under agency-vendor agreements providing for payments of definite amounts at fixed periodic intervals.
Settlement date: The date on which an EFT payment is credited to the vendor’s financial institution.
Utilities and telephones: This includes electricity, water, sewage services, natural gas, and telephone services. Utilities and telephones can be regulated, unregulated, or under contract. All utilities and telephone service payments, are subject to the Prompt Payment Act. Where state, local, or foreign authorities impose generally applicable late-payment rates for utilities payments, those rates shall take precedence. In the absence of any such rates, the Prompt Payment Act applies. Refer to 5 CFR Part 1315.1.
Vendor: Any person, organization, contractor, or business concern engaged in a profession, trade, or business and any not-for-profit entity operating as a vendor (including state and local governments and foreign entities and foreign governments but excluding Federal entities).
4 FAM 422.1-2 Prompt Payment Act – Mandatory Requirements for Payments
(CT:FIN-463; 04-19-2021)
a. The Prompt Payment Act of 1982, as amended, accelerates payments (see 4 FAM 422.2, Accelerated and Despatch Agent Payments) made by U.S. agencies to business contractors and sets forth the basis for receiving and processing invoices. It also requires the payment of interest when an agency does not meet the required payment due dates.
b. The Prompt Payment Act applies to all payments made to both U.S.-based and foreign vendors, contractors, and subcontractors. The Prompt Payment Act does not apply to payments made to employees of the U.S. Government.
c. All Department personnel (overseas and domestic) involved in the processing of payments are responsible for compliance with the Prompt Payment Act and must:
(1) Pay all bills so the vendor receives payment as close as possible and no more than seven days prior to, but not later than, the due date or if appropriate, the discount date. Exceptions to this rule are payments to government-wide commercial purchase card issuers where all individual purchase card invoices under the maximum $2,500 threshold may be paid at any time, but not later than 30 days after the receipt of a proper invoice (see 5 CFR Part 1315.12), fast payments under the Federal Acquisition Regulation at Part 13.4, accelerated payments at 5 CFR Part 1315.5, and as authorized under Executive policy directives issued by the Office of Management and Budget;
(2) Pay interest penalty payments when a payment is late, without the need for vendors or contractors to request them. Each payment for which a late payment interest-penalty is paid must be accompanied by notice to the vendor and the funding program office, stating the amount of interest included in the payment and the rate and number of days used to compute the interest. Use the current Treasury rate, as published in the Federal Register and available on the CGFS website, to calculate the interest penalty. In locations where a different interest rate or payment cycle for utilities may be specified under local law or regulation, the local law or regulation for such payments must be followed;
(3) Pay interest penalties out of amounts available to the agency to carry out the program for which the penalty is incurred. The Prompt Payment Act does not authorize the appropriation of additional amounts to pay penalties;
(4) Take discounts only when payments are made by the discount date;
(5) Maintain records of all discounts taken and lost; and
(6) If the designated billing office fails to annotate the invoice with the date of receipt, the date of the invoice will be considered to be the date on the invoice issued by the vendor.
d. Proper handling of invoices will minimize prompt payment penalties. All claims subject to prompt payment penalties are flagged and a late payment reason must be entered into the financial system.
4 FAM 422.2 Accelerated and Despatch Agent Payments
4 FAM 422.2-1 Accelerated Payment
(CT:FIN-463; 04-19-2021)
Section 1315.5 of 5 CFR includes the following:
(1) A single invoice under $2,500: Payments may be made as soon as the obligating document or agreement, proper invoice, receipt and acceptance documents are matched except where statutory authority prescribes otherwise and except where otherwise contractually stipulated (e.g., government-wide commercial purchase card.) Vendors shall be entitled to interest penalties if payment is not made within 30 days after receipt of a proper invoice according to the Prompt Payment Act.
(2) Small business (as defined in FAR Part 19.001 (48 CFR 19.001)): Agencies may pay a small business as quickly as possible, when all proper documentation (obligating document or agreement, proper invoice, receipt and acceptance documents), is received in the payment office and before the payment due date. Such payments are not subject to payment restrictions stated elsewhere in this part. Vendors shall be entitled to interest penalties if payment is not made within 30 days after receipt of a proper invoice according to the Prompt Payment Act.
(3) Emergency payments: Payments related to emergencies and disasters (as defined in the Robert T. Stafford Disaster Relief Act and Emergency Assistance, Public Law 93-288, as amended (42 U.S.C. 5121 et seq.); payments related to the release or threatened release of hazardous substances (as defined in the Comprehensive Environmental Response Compensation and Liability Act of 1980, Public Law 96-510, 42 U.S.C. 9606); and payments made under a military contingency (as defined in 10 U.S.C. 101(a)(13)) may be made as soon as the obligating document or agreement, proper invoice, receipt and acceptance documents or any other agreement are matched. If there is a delay in matching the required documentation, it does not preclude vendors from receiving interest penalties if invoice payments are made after the applicable payment due date specified in 5 CFR 1315.12.
4 FAM 422.2-2 Payments for Goods Received by Despatch Agent
(CT:FIN-463; 04-19-2021)
Payment to U.S. companies for goods delivered to the U.S. Despatch Agent is made before goods are actually received at posts. In such cases, approval is based on the notice of acceptance sent by the Despatch Agent to the post.
4 FAM 422.3 Receipt of Invoices
(CT:FIN-463; 04-19-2021)
Invoices are dated (stamped or otherwise annotated, electronically if an electronic invoice) upon receipt by the designated billing office (the office or employee designated in the contract to receive the invoices). If a hard-copy invoice is electronically scanned or digitally imaged after receipt by the designated billing office, the date actually received is to be used and not the date the invoice is subsequently scanned or imaged. When a vendor submits an electronic invoice during non-business hours of the designated billing office, the invoice receipt date will be the next business day from the date assigned by the electronic equipment used.
4 FAM 422.3-1 Designated Billing Office
(CT:FIN-463; 04-19-2021)
a. The ordering officer must require that all obligating documents or agreements (e.g., contracts, purchase orders, bilateral agreements, etc.) specify the designated billing office where invoices are to be submitted by the vendor. Ordering officer compliance should be monitored by the Office of Acquisitions Management or the office issuing the award, and noncompliance should be reported to the post management officer or bureau officials.
b. Domestically, the Invoice Processing Platform (IPP) replaces the matching function done predominately by the designated billing office. For domestic obligations that are not an IPP designated billing office, CGFS/F/C (unless specifically exempted by CGFS/F/C) is the designated billing office for the direct submission of invoices.
c. Overseas, the financial management office is the designated billing office unless otherwise designated in the obligating document.
4 FAM 422.3-2 Return of Improper Invoices
(CT:FIN-463; 04-19-2021)
a. Each invoice received by a designated billing office whether in hard copy, scanned to create a digital record, transmitted in an email, converted to eInvoicing, or received through IPP, must be reviewed promptly and rejected if not correct and outside of CGFS management approved tolerances. The date of rejection for an improper invoice must be recorded in the accounting system.
b. Notice of an apparent error, defect, or impropriety in an invoice must be given to the vendor within 7 days of receipt of the invoice. The notice must specify the reason the invoice is not proper. As required by the Prompt Payment Act, the number of days available for timely payment without incurring interest penalties must be reduced by the number of days the paying office exceeds the 7 day requirement to return the improper invoice.
c. Generally, when an invoice is submitted via IPP or an overseas equivalent with system invoicing controls (i.e., eInvoicing), it is a bureau or post approving officer responsibility to reject invalid or improper claims and notify the vendor of the reason for the rejection.
d. When an invoice that is submitted through the Office of Claims and it is clear the invoice is improper (e.g., no invoice number, no referenced award or contract, etc.), the office will return these documents to the vendor notifying them of the error and requesting resubmission of a proper claim for processing and payment.
e. The 7 day rejection time period for invoices includes the time needed to route an invoice that has been received in the designated billing office. Invoices may be routed by the designated billing office to the approving official via an electronic routing process.
4 FAM 422.3-3 Hard Copy Vendor Invoices Submission
(CT:FIN-463; 04-19-2021)
For payments that will be processed at the location where the invoice is submitted, the invoice must be original, approved, and provide adequate identification of the goods or services that warrant the payment. If a scanned hard copy invoice is to be submitted to the post support unit (PSU) after approval, the invoice should be clearly approved, annotated, and digitally imaged into a digital record.
4 FAM 422.3-4 Electronic Vendor Invoices Submission
(CT:FIN-463; 04-19-2021)
a. The Department has implemented the Invoice Processing Platform (IPP) domestically, and eInvoicing at overseas locations. While different in design, both systems handle electronically submitted or digitally imaged vendor invoices.
b. Domestic offices involved in the approval process view and approve invoices submitted by vendors in IPP. Once all approvals have been secured in accordance with system controls, the voucher is certified for payment to the vendor.
c. At overseas locations that serve as the designated billing office, hard copy/electronic invoices, files, or pdf documents submitted by vendors are converted into a compatible digital record and attached to the electronic payment voucher for processing. A properly submitted invoice is routed and a voucher is prepared and paid once approved by the designated approving official.
d. Electronic vendor invoices not processed through IPP or eInvoicing are uploaded and approved directly in the post or domestic financial system.
4 FAM 422.3-5 Time-Barred Invoices
(CT:FIN-463; 04-19-2021)
In accordance with 31 U.S.C. 3702 and 3726, a claim shall be allowed only if it is received by the designated billing office:
(1) For the payment of transportation related invoices, not later than 3 years, excluding time of war, after the later of the following dates:
(a) Accrual of the claim;
(b) Payment for the receipt of goods or services is made;
(c) Refund for an overpayment for the goods or services is made; or
(d) Deduction is made from amounts due to the claimant to adjust excess charges paid previously; and
(2) For the payment of all other invoices, the claim must be received within 6 years after the claim accrues unless the claim falls under the limited exceptions in 31 U.S.C. 3702 (exceptions relate to claims of a state, the District of Columbia, U.S territories and possessions as well as members of the armed forces during a time of war).
4 FAM 422.4 Solicitation of Invoices
(CT:FIN-463; 04-19-2021)
a. Management officials at each post, bureau, and office are responsible for establishing a procedure that periodically identifies those invoices that need to be solicited (i.e., those for which goods or services have been received or performed but not liquidated). Exercise discretion in making invoice solicitations so there is no question of the U.S. Government’s liability or dispute about the facts.
b. The management or financial management officer may obtain invoices and supporting documents from vendors and contractors in order to make prompt payment for current legitimate claims for goods and services obtained through proper procurement methods.
c. For purposes of Prompt Payment Act penalties, and when the vendor is required to submit an invoice, the payment clock starts upon actual receipt of the invoice and not at the point a solicitation is initiated by a bureau or post official.
4 FAM 422.5 When an Invoice is not Needed
(CT:FIN-463; 04-19-2021)
a. An invoice is not needed for:
(1) Transfers and purchases between U.S. agencies where an agreement between the Department and the relevant agency covers the range and cost of transactions; or
(2) Recurring payments for services if an agreement exists covering the payment of fixed amounts at regular intervals, all in the same way as payments for one-time purchases, as though the vendor provided an invoice.
b. If charges are determined to be changing on a monthly basis or the monthly charges are inconsistent with an established agreement, an invoice must be submitted by the vendor and the contracting officer or the designated contracting officer representative must approve an invoice for these payments.
4 FAM 422.6 Invoice Consolidation
(CT:FIN-463; 04-19-2021)
In accordance with Department of the Treasury guidance, all payments should be made by electronic funds transfer (EFT). In order to reduce the number of EFT payments or checks written (when needed) by the U.S. disbursing officer (USDO) and the U.S. Treasury, finance offices should consolidate invoices to the same vendor (and address) for payment by a single check with the following conditions:
(1) Payment is to be made to a single office or location;
(2) Payment is on behalf of a single U.S. Government bureau within a U.S. Agency except when payment is made overseas, in which case, the payment may be made on behalf of more than one U.S. Agency;
(3) Consolidation is agreeable to the vendor or U.S. Agency;
(4) Consolidation does not result in loss of discounts (this might occur if invoices carrying discount terms are held for payment beyond the discount date in order to combine with other invoices received or expected); and
(5) Provisions of the Prompt Payment Act are not violated. Invoices should not be held beyond the payment due date (as defined under the Prompt Payment Act) solely for the purpose of consolidation with other invoices received or expected. The Department is liable for interest and penalties for any delays in payment to all vendors notwithstanding anything stated under this section.
4 FAM 422.7 Lost Invoices/Vouchers
(CT:FIN-463; 04-19-2021)
The Prompt Payment Act applies to lost invoices as well as to other invoices. The date of receipt of the invoice that is determined to be lost is the date on which the Department becomes liable for timely payments even if the original invoice is never located and subsequently paid with a duplicate copy or by memorandum including the details of the underlying transaction. If examination and certification are delayed, causing payment beyond the due date (based on the date of receipt of the original invoice), the Department remains liable for interest and penalties.
4 FAM 422.7-1 Before Payment
(CT:FIN-463; 04-19-2021)
a. When an original voucher or invoice is lost before payment, the approving official obtains another voucher or invoice (unsigned) from the payee, if a copy is not on file. On all such duplicates, the payee must state that the original has been lost and that payment has not been received.
b. If a memorandum copy of the lost voucher or invoice is available, the approving official prepares a new voucher or invoice from it. The new voucher or invoice must be distinctly and prominently marked “DUPLICATE.” Attach the memorandum copy of the lost voucher to the duplicate.
c. The approving official inserts or securely attaches a full explanation of the circumstances surrounding the loss or destruction of the original voucher or invoice to the duplicate voucher.
d. A certification that administrative control has been established is required to preclude the making of a duplicate payment in the event that the original voucher or invoice is subsequently located. Attach and file together all documents pertaining to both the original and the duplicate voucher.
4 FAM 422.7-2 After Payment
(CT:FIN-463; 04-19-2021)
a. If an original voucher is lost after payment or prior to conversion to a digitally imaged document, the finance staff should prepare another voucher based on the memorandum copy and mark such a voucher distinctly and prominently “SECOND ORIGINAL—PAID.” The payee need not sign the voucher. The voucher must have supporting approval similar to the original voucher.
b. The finance staff should provide a full explanation of the circumstances surrounding the loss of the original voucher and attach the memorandum copy. The second original is to be attested as a true copy of the first, over the signature of the certifying officer. The memorandum copy of the second original must be attached to the memorandum copy of the lost voucher and filed together with all documents pertaining to both the first and second original vouchers.
c. If an electronic process is being used to process a lost voucher after payment, the documentation must be maintained in a manner that provides a clear audit trail for both the first and second original vouchers.
4 FAM 423 VOUCHER PROCESSING REQUIREMENTS
(CT:FIN-463; 04-19-2021)
The general requirements for voucher processing, when preparing and examining vouchers for submission for approval, examination, certification and payment are provided in the following subsections. These requirements relate to blanket purchase agreements, state and local taxes, recurring payments, supporting documentation, voucher security classification, currency data, and accounting classification data.
4 FAM 423.1 Blanket Purchase Agreements
(CT:FIN-481; 01-05-2022)
a. The Department may enter into a Blanket Purchase Agreement (BPA) with a vendor for day-to-day requirements. The BPA is issued to a single vendor for a range of supplies or services on which a number of invoices and payments are processed. The original agreement for contractual and billing information must be verified.
b. A blanket purchase agreement is not an obligating document but the orders placed under a BPA create an obligation with the vendor. Funds are obligated through a BPA call or a bulk obligation for BPA orders.
4 FAM 423.2 State and Local Taxes
(CT:FIN-481; 01-05-2022)
Domestically, the Department is exempt from paying state and local taxes. Invoices or vouchers with such taxes must be returned to the claimant or the amount of the taxes should be deducted and the net amount for payment should be vouchered. If the amount of the tax is $10 or less, the tax can be paid (Title 7 of the Government Accountability Office Policy and Procedures Manual for Guidance of Federal Agencies, Appendix IV.) The vendor should be informed of the net amount in the case of a tax deduction and of the Department’s tax-exempt status.
4 FAM 423.3 Recurring Payments
(CT:FIN-463; 04-19-2021)
Recurring payments should be vouchered in accordance with the provisions of 4 FAM 422, Invoice Requirements for Voucher Payments. However, when available and feasible, the Department should maximize the use of commercial bank cards for micro-purchases (see 48 CFR 2.101).
4 FAM 423.4 Complete and Partial Payments
4 FAM 423.4-1 Complete or Initial Partial Payments
(CT:FIN-463; 04-19-2021)
a. Form DS-2076, Purchase Order, Receiving Report and Voucher, for overseas purchases or Form OF-0347, Order for Supplies or Services, for domestic purchases should be prepared when goods and services are requested. These forms or their Department approved electronic equivalent will serve as the original obligation document. When goods and services have been fully received, the hard copy or electronic form serves as the voucher with the vendor invoice supporting Forms DS-2076 or OF-0347.
b. When an initial partial invoice is received, a copy of the original Forms DS-2076 or OF-0347 or the Department approved equivalent supports the invoice and the receiving documentation, which is certified for payment. New Forms DS-2076 or OF-0347 should not be prepared and used as support for partial payments.
4 FAM 423.4-2 Subsequent Partial Payments
(CT:FIN-463; 04-19-2021)
Each subsequent partial payment for goods or services furnished (pursuant to a purchase order issued on Forms DS-2076 or OF-0347) is to be vouchered using a copy of the original Forms DS-2076 or OF-0347 or the Department approved equivalent as the supporting documentation. The final invoice is attached to the original Forms DS-2076 or OF-0347 or the Department approved equivalent system configuration for certification to pay.
4 FAM 423.4-3 Supporting Documentation
4 FAM 423.4-3(A) Purpose and Scope
(CT:FIN-463; 04-19-2021)
Supporting documentation is required to ensure that all payments are authorized, accurate, legal, correct, and that the goods were actually received or services actually performed. Supporting documentation for voucher processing includes purchase orders and contracts, invoices and vouchers, receiving reports and approvals.
4 FAM 423.4-3(B) Documentation Requirements
(CT:FIN-463; 04-19-2021)
a. A proper obligating document (e.g., contract, purchase order, or agreement) contains the following:
(1) Vendor’s complete name, registered address, and financial institution address;
(2) Vendor code – The contracting officer must verify the vendor’s active registration status in the System for Award Management (SAM) via the SAM Registration website;
(3) The contracting officer must identify an exception to the SAM registration requirement (FAR 4.1102) for an unregistered vendor;
(4) Taxpayer identification number (TIN) or social security number (SSN) is mandatory for domestic payments, U.S. citizens, and green card holders;
(5) Purchase order or contract number;
(6) Description of the goods to be provided or services to be rendered. For purchase orders include quantity, individual price, estimated shipping cost, and total estimated costs. For contracts, include payment schedule and total cost of the contract;
(7) Complete address of the office to be billed;
(8) Complete shipping instructions with the shipping address;
(9) Terms of the transactions, when other than normal to make a proper, legal, and correct payment;
(10) Full fiscal accounting classification; and signed certification by the funds control officer that funds are available;
(11) Name and signature of the ordering or contracting officer;
(12) Banking information (vendor or contractor’s financial information must be registered in the CCR database) unless agency procedures provide otherwise or except in situations where the EFT requirement is waived under 31 CFR 208.4;
(13) For interagency agreements, the agency’s fund symbol must be identified on the documentation; and
(14) Any other supporting documentation required by the contract or agreement terms.
b. A proper receiving document (receiving report, shipping document, memo from an individual authorized to receive and accept the goods or services, annotation of receipt on the invoice, or where automated receipt capability has been provided) contains the following:
(1) Related obligating document number;
(2) Vendor name;
(3) List of goods or services received, including descriptions, quantities, and unit prices, or statement by an authorizing officer that services have been rendered;
(4) Date(s) goods were delivered or services were provided and date(s) goods and services were accepted; and
(5) Name and appropriately formatted signature (original, digital, or electronic) of a U.S. agency representative authorized to receive and accept the goods or services.
4 FAM 423.4-3(C) Other Official Records and Documentation When Appropriate for Certifying Payments
(CT:FIN-463; 04-19-2021)
a. Under appropriate circumstances the Department recognizes official records and documentation to include official telegrams transmitted from the Department of State or other agencies of the Federal Government with the name of an authorized official taking responsibility for the funds availability certification. Likewise, an official memorandum from the holder of a non-serviced (accounting) allotment may also suffice. The signature of an allotment holder (or a designated representative at a post with funds control authority) on a purchase order or other legal obligating document signifying funds availability could also provide documentation and reasonable assurance under most circumstances that the obligation has been entered into the agency official records and that the funds are legally available.
b. A Military Interdepartmental Purchase Request (MIPR) is not equivalent to an allotment document issued by the Department of State. A MIPR represents an official Department of Defense (DOD) reservation of funds that is available until revoked by the issuing DOD office and must be signed by a responsible military person at the post. FMOs may not sign a MIPR. When a MIPR is issued on a direct fund cite basis and executed by authorized U.S. entities, it serves as an official notification that funds have been reserved by DOD and are available for the stated procurement action. DOD individuals at the post must take responsibility for the MIPR and track these funds which includes signing funds availability statements on all obligating documents issued that cite fiscal data from the MIPR. Responsibilities also include ensuring that the resulting obligation(s) are properly recorded on the agency’s (e.g., DOD and component organizations that use MIPRs) books. Use of the DFAS/DOS crosswalk to ensure valid data is processed onward to the Defense Finance Accounting Service (DFAS) is mandatory (see 4 FAM 242.2). Completion of crosswalks is the responsibility of the DOD Financial Managers and their designated certifying officials within each Combatant Command (COCOM) entity.
4 FAM 423.5 Voucher Security Classification
4 FAM 423.5-1 Unclassified Vouchers Authorized by Classified or Confidential Non-Security Communications
(CT:FIN-463; 04-19-2021)
Classified material should not be referenced in unclassified vouchers submitted with the regular accounts. Instead of citing classified documents in such vouchers, the approving official places the following statement in the body of the voucher: “Authorized by classified or confidential non-security communication.”
4 FAM 423.5-2 Classified or Confidential Non-Security Vouchers
(CT:FIN-463; 04-19-2021)
Copies of each classified or confidential non-security voucher should be labeled with the appropriate security classification. In unclassified reports which cover classified or confidential non-security vouchers, such vouchers should be identified by voucher numbers, funds chargeable, and amounts.
4 FAM 423.6 Currency Data – Overseas Operations
(CT:FIN-463; 04-19-2021)
a. All vouchers must be prepared in the currency shown on the billing invoice. A separate Voucher Schedule should be prepared for each currency.
b. The currency in which an invoice is to be paid must be indicated clearly in the “Approved for” or equivalent field. Billings made in local currency are paid in local currency. The U.S. dollar equivalent of local currency using the current exchange rate in effect at the time of the payment must be included in the fiscal data. U.S. dollar payments in lieu of local currency may not be made unless specifically approved by the post FMO for a particular vendor and only if permitted by local currency laws of the country.
4 FAM 423.7 Accounting Classification Block
(CT:FIN-463; 04-19-2021)
The accounting classification data must be indicated on all vouchers, including classified vouchers. The information to be shown in this portion for each type of voucher is provided in 4 FAH-1, Account Structure and Classification Codes.
4 fam 424 Voucher PREPAYMENT Examination
4 FAM 424.1 Voucher Prepayment Examination Requirements
(CT:FIN-463; 04-19-2021)
a. The principal objectives for prepayment voucher examination is to determine whether:
(1) The invoice is supported by a valid obligation;
(2) The information on the voucher and supporting documents is proper and correct;
(3) All adjustments have been made to the vouchered amount; and
(4) The payment has already been made (to prevent a duplicate payment).
b. A voucher for a valid payment request requires that:
(1) Required administrative authorizations for procurement and approvals for payment were obtained, including a copy of the obligating document;
(2) Payment is permitted by law and in accordance with the terms of the applicable agreement; and
(3) The obligation from which the payment will be made has an adequate unexpended balance to cover the payment.
c. For information on the voucher and supporting documents to be proper and correct requires that:
(1) Proper forms of documentation are used;
(2) Special certificates, if required, are furnished;
(3) The amount of the payment and the name of the payee are correct. If the payee is an individual, first, middle (or initial), and last names are to be shown in that order, unless local custom dictates otherwise;
(4) The goods received or the services performed that are being billed for are in accordance with the obligating document; and
(5) The quantities, prices, and amounts on the voucher are accurate, agree with the ordering document and receiving report or other valid proof of receipt and acceptance of goods/services, and is approved by the correct approving official. The signed receiving report can indicate approval of the voucher only if the receiving officer is authorized and the receiving report is in agreement with the ordering document and voucher description of items, prices, and quantities. In some instances, the contracting officer may not delegate a receiving officer authority for voucher approval and may require a specific authorized official.
d. To ensure that all adjustments are made to the vouchered amount requires that:
(1) All cash, trade, quantity, or other cost-effective discounts are taken and, if not, whether the reason is shown on the appropriate document;
(2) All applicable deductions are made and credited to the proper account in the correct amount; and
(3) Vendor or Employee vouchers with variances resulting in overpayments within CGFS management approved tolerances, related to e-market price fluctuations between vendor invoices and procurement instruments, exchange rates, or currency denomination limitations, do not return the voucher to post or request a corrected invoice. Process the claim as submitted. Similarly, only process supplemental voucher claims for underpayments within CGFS management approved tolerances, when specifically requested by the payee.
e. For any system computation error related to local currency rounding, exchange rate fluctuations, or decimal point extension errors that results in a voucher overclaim or underclaim within the CGFS management approved tolerances, do not return the voucher to post or request a corrected invoice. Process the claim as submitted.
f. Following voucher prepayment examination, pre-certification review and approval by a voucher approver may be required in accordance with the CGFS management approved financial workflow configuration.
4 FAM 424.2 When Prepayment Examination not Needed
(CT:FIN-463; 04-19-2021)
a. Interagency bills rendered by one U.S. Government agency to another on a reimbursable basis under 31 U.S.C. 1535 or similar provisions of law are not subject to examination or certification before payment (see 4 FAM 840).
b. When fast pay procedures are authorized as a contract provision a vendor may be paid before the receiving report is obtained if subsequent payments are anticipated under the contract or purchase order. Section 1315.6 of 5 CFR describes payment without evidence that supplies have been received (fast payment) as follows:
(1) In limited situations, payment may be made without evidence that supplies have been received. Instead, a vendor certification that supplies have been shipped may be used as the basis for authorizing payment. Payment may be made within 15 days after the date of receipt of the invoice. This payment procedure may be employed only when all of the following conditions are present:
(a) Individual orders do not exceed $25,000 even though 5 CFR 1315.6(1) permits the Department to establish a higher amount on a case-by-case basis;
(b) Deliveries of supplies are to occur where there is both a geographical separation and a lack of adequate communications facilities between Government receiving and disbursing activities that make it impracticable to make timely payments based on evidence of Federal acceptance;
(c) Title to supplies will vest in the government upon delivery to a post office or common carrier for mailing or shipment to destination or upon receipt by the government if the shipment is by means other than the Postal Service or a common carrier; and
(d) The vendor agrees to replace, repair, or correct supplies not received at destination, damaged in transit, or not conforming to purchase requirements.
(2) The designated receiving official shall promptly inspect and accept supplies acquired under these procedures and shall ensure that receiving reports and payment documents are matched and steps are taken to correct discrepancies.
(3) Domestic bureau and post management officials shall ensure that specific internal controls are in place to assure that supplies paid for are received.
(4) As authorized by the 1988 Amendment to the Prompt Payment Act (Section 11(b)(1)(C)), a contract clause at 48 CFR 52.213-1 is provided in the Federal Acquisition Regulations (FAR) at 48 CFR part 13, subpart 13.4 “Fast Payment Procedure,'' for use when using this fast payment procedure.
c. A direct debit (prime pay) bank account may be established for paying utility and telephone bills. Payments are made prior to receipt and certification of an invoice by CGFS or by post. The prime pay program provides an alternative method for paying bills in countries where payment is expected within an unusually short period of time.
d. A post payment examination is made to assure that the payment was proper. If required, an adjustment is made on the next invoice submitted by the vendor.
4 FAM 425 VOUCHER DEDUCTIONS, SUSPENSIONS, AND DISALLOWANCES
(CT:FIN-463; 04-19-2021)
Whenever an amount is due the U.S. Government from a carrier or vendor, collection is made by deduction (offset), if possible, from the current or next voucher submitted for payment. Such deductions must be made whether or not the collection is related to the voucher submitted for payment.
4 FAM 425.1 Recovering Amounts Due
(CT:FIN-463; 04-19-2021)
a. Whenever an amount is due the U.S. Government from a carrier or vendor in excess of the CGFS management approved threshold, the domestic Office of Claims, or post FMO initiates collection against the vendor in accordance with 4 FAM 490, Debt Collection.
b. Procedures for recovering advances due from employees by travel voucher deductions are provided in 4 FAM 464.4.
4 FAM 425.2 Adjusting Errors Between Appropriations
4 FAM 425.2-1 Documentation
(CT:FIN-463; 04-19-2021)
Finance staff must document adjustments between appropriations and allotments resulting from errors found in the USDO’s accounts, after the accounts have been closed for the month in which the payments or collections were made, on Form SF-1081, Voucher and Schedule of Withdrawals and Credits. Reference the original voucher number with the reason or explanation on Form SF-1081. Prepare Form OF-1017-G, Journal Voucher, to correct errors in the FMO accounts for allotments controlled by the FMO, and for all domestic adjustments.
4 FAM 425.2-2 Responsibility
(CT:FIN-463; 04-19-2021)
Posts and bureaus that recognize transactions were posted to the incorrect appropriation or allotment should initiate action to correct the posting. A transfer document within the financial system that decreases the disbursement to the incorrect appropriation and increases the disbursement to the correct appropriation is used to correct the transaction. For assistance, post should contact their post accountant in Charleston or Bangkok and bureaus should contact their bureau accountant in Charleston.
4 FAM 425.2-3 Accounting
(CT:FIN-463; 04-19-2021)
a. Adjustments to incorrect disbursements and collections are initiated and executed at posts. All appropriation adjustments which occur at posts are no-check transactions (called an appropriation transfer or journal voucher) but will flow through the system to be reflected on Form SF-1221, Statement of Transactions According to Appropriations, Funds, and Receipt Accounts (Foreign Service Account), of the appropriate U.S. Agency(s).
b. Domestically, such adjustments occur through no-check zero dollar reclassifications, which will be executed by CGFS/F. The adjustments will flow through the financial system to Treasury via the bulk file submission and be reflected in the Central Accounting System (CARS) at Treasury.
4 FAM 426 TAX WITHHOLDING AND REPORTING
(CT:FIN-463; 04-19-2021)
The Department’s policy on withholding taxes from payments to certain U.S. payee contractors applies when a contractor does not provide a taxpayer identification number. The Department is required to report payments made to certain contractors to the Internal Revenue Service (IRS) and other appropriate tax authorities in accordance with 26 U.S.C. 6041.
4 FAM 426.1 Definitions
(CT:FIN-463; 04-19-2021)
Compensation: As used in this subchapter, includes housing and education allowances paid domestically, whether taxable or not; it does not include travel reimbursement if itemized on a nonemployee’s invoice.
Data universal numbering system (DUNS): A unique 9-character identification number provided by Dun & Bradstreet. The Federal Government requires business entities, self-employed individuals, contractors, and individuals who provide services or goods to have a DUNS number.
Employer identification number (EIN): A taxpayer identification number obtained by sole proprietors, businesses, and U.S. agencies to identify themselves when reporting wage and/or salary payments made as employers to other contracted parties.
Taxpayer identification number (TIN): The nine-digit Employer Identification Number (EIN) or Social Security Number (SSN) as defined in section 6109 of the Internal Revenue Code of 1986 (26 U.S.C. 6109).
4 FAM 426.2 Withholding Requirements
(CT:FIN-463; 04-19-2021)
The Department’s paying offices must secure a payee’s Taxpayer Identification Number (TIN) where required before issuing a payment. U.S.-based vendors normally include their TIN on their invoices. If the payee is an individual, the social security number is the TIN. If the individual does not provide their TIN, backup withholding of 20 percent must be withheld from the gross payment. The total gross payment and the Federal tax withheld is recorded at year end on IRS Form 1099.
4 FAM 426.3 Reporting Requirements
4 FAM 426.3-1 Employer Identification Number (EIN)
(CT:FIN-463; 04-19-2021)
The Department of State centrally maintains EINs domestically and overseas. Post management should contact the Grants Officer at post for verification of an existing EIN. If no EIN is found and prior to requesting one from the IRS, CGFS Office of Overseas Accounting (CGFS/F/AOO) can be contacted for instructions if an EIN is needed for a separate entity within the mission. Contact CGFS at CGFS-OverseasAccounting-1099-DL@state.gov for information on the RFMS/M 1099 overseas process.
4 FAM 426.3-2 Report Dates, Forms, and Exclusions
(CT:FIN-463; 04-19-2021)
a. The Department payment offices are required by the Internal Revenue Code to complete, by January 31 of each year, certain forms (e.g., IRS Form W-2, Wage and Tax Statement, IRS Form 1099-INT, Statement for Recipients of Interest Income, IRS Form 1099-MISC, Statement for Recipients of Miscellaneous Income, IRS Form 1099-G, Certain Government Payments), IRS Form 1099-C, Cancellation of Debt, and IRS Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. for the tax year ending December 31 of the previous year. The forms are due to the payee on January 31 and to the IRS on February 28 (or March 31, if filing electronically) of the year for which the returns are being filed.
b. Forms to be filed include:
(1) IRS Form W-2, Wage and Tax Statement, to report wages and other compensation paid to personal services contractors for whom taxes were withheld during the year;
(2) IRS Form 1099-INT, Statement for Recipients of Interest Income, to report interest payments (due to late payments made under the Prompt Payment Act), not including interest on an IRA, of $600 or more, made to individuals, partnerships, or trusts; and
(3) IRS Form 1099-MISC, Statement for Recipients of Miscellaneous Income, to report nonemployee compensation and other payments, including rent, royalty, and fees to subcontractors and others not treated as Department employees. The Department is to report on Form 1099-MISC any compensation of $600 or more to any person, partnership, or professional group (e.g., a medical corporation where the physicians are taxed individually) in a given calendar year. This requirement applies to any recipient that is subject to U.S. tax laws, including foreign nationals with green cards.
(4) IRS Form 1099-G, Certain Government Payments, to report amounts of taxable grans of $600 or more. Since most Federal assistance awards are issued to tax-exempt IRS 501(c)(3) organizations, tax reporting for grant recipients is generally limited to awards to individuals subject to U.S. tax laws, including foreign nationals with green cards, certain Fulbright Educational Exchange participants, and for-profit organizations. Visit the IRS website for more information.
(5) IRS Form 1099-C, Cancellation of Debt, to report discharged (canceled or forgiven) debt owed, or because an identifiable event has occurred that either is or is deemed to be a discharge of a debt of $600 or more.
(6) IRS Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to report distributions from annuities, profit-sharing plans, retirement plans, IRAs, insurance contracts, or pensions.
c. Payments to the following recipients are not to be reported on IRS Form 1099:
(1) Recipients whose compensation is reported on IRS Form 941, Employers’ Quarterly Federal Tax Return and/or IRS Form W-2;
(2) Tax-exempt organizations, the United States, a State, the District of Columbia, a U.S. possession, or a foreign government; and
(3) Recipients not subject to U.S. tax laws.
4 FAM 427 IMAGING INVOICES AND VOUCHER DOCUMENTATION
(CT:FIN-463; 04-19-2021)
This section provides guidance for imaging/scanning invoices and voucher related documentation.
4 FAM 427.1 Hard Copy Invoices and Vouchers
(CT:FIN-463; 04-19-2021)
a. Digitized images of hard copy original invoice and voucher documentation to support invoice examination and payment authorization must be retained in the financial system or a consolidated and standardized database of processed images or transactions if not using Department approved electronic platforms to attach documents, in accordance with record retention policies. The hard copy original invoice and voucher documentation may be disposed of in accordance with record disposal policies once the digitized images are retained in the financial system or consolidated and standardized database.
b. All invoice documents that have been imaged must be canceled or otherwise annotated to prevent duplicate processing and all digital images must be retained for the required retention period.
c. If an original document is not received in electronic format and is required for investigation or inspection purposes, an electronic copy of the original document may be used.
d. All hard copy invoices, vouchers and supporting documents may be archived into a digital format consistent with the guidance noted in 4 FAM 427.2, Imaging Supporting Documents.
e. Travelers must retain official travel voucher records and may be requested to provide a receipt or receipts and substantiate or provide justification to clarify and validate any claimed expense or expenses that the bureau, office, post, or certifying officer determines is necessary to process the claim, regardless of amount (see 4 FAM 465.1-3).
4 FAM 427.2 Imaging Supporting Documents
(CT:FIN-463; 04-19-2021)
a. Electronic technology can now be used to process, store, and retrieve data on paper documents provided adequate controls have been implemented to ensure data integrity and compliance with regulatory requirements. Essentially, key documents (e.g., purchase order, receiving reports, and invoices) needed for payment certification on manual/electronic vouchers can exist or originate in an electronic format or be converted to an electronic format.
b. Department of State personnel may use electronic images or electronically generated invoices in place of paper documents to make payments if the process is conducted on Department approved electronic platforms (see 5 FAM 400, Records Management and 5 FAH-4 H-100, Records Management), the scanning activity is consistent with 5 FAH-4 H-610, Procedures for Digital Imaging Records, and there are internal controls to ensure the images are accurate and unaltered after conversion to an electronic format (see 4 FAM 046, Financial Systems Controls).
c. Each approving official using a scanned digital image or other electronic document must review submitted documents for validity and must make sure that they can rely on the imaged documents and automated system controls. More specifically, post management, approving official, or other individual dealing with electronic processing must be aware of and comply with the established internal control procedures regarding the following:
(1) System controls to detect duplicate invoices,
(2) Signatures are from current authorized approving officers,
(3) The images are submitted by authorized personnel for authorized purposes, and
(4) Digital images are not destroyed but remain accessible until the applicable retention period expires.
d. When authorized changes are made to a previously imaged original invoice document, the unaltered copy of the original image should be voided and maintained to facilitate adequate audit trails.
4 FAM 428 and 429 UNASSIGNED