UNCLASSIFIED (U)
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 theTreasury 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 forthese operations with Treasury checks. The requirements apply to USDOoperations abroad and at Washington disbursing operations serviced by TreasuryRegional Financial Centers. Additional procedures related to Treasury checksissued by overseas disbursing operations are contained in 4 FAH-2, DisbursingOfficer Handbook.
b. The requirements for depositary checks abroad appearin 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 toIssue Checks and Other Drafts;
(2) Treasury Financial Manual, Volume 1, Part4-Chapter 5000, Requisitioning, Preparing and Issuing Treasury Checks; Chapter6000, 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 BankingAct 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): A3-digit (Regional Finance Centers), 4-digit (Non-Treasury disbursing offices),or 8-digit (Treasury disbursing offices) identifier assigned byTreasury’s Bureau of the Fiscal Service (BFS) for reporting purposes.
Available check: A check thathas not been paid by Treasury and is in the possession of the certifying ordisbursing office.
Budget clearing account 19F3880:A clearing account established by Treasury for recording and adjusting creditsand charges from the processing of claims on unavailable checks. ALCadministrators are responsible for expeditiously clearing credits and chargesin the Treasury account to the proper Department of State account.
Cancellation: The process ofrendering a check nonnegotiable after it has been issued and repaying theamount of the check (whether available or unavailable) to an appropriation orfund 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 symbolnumbers inscribed on the U.S. disbursing officer's (USDO) checks.
Chief disbursing officer (CDO):Treasury official who directs disbursing operations performed by the Treasuryregional disbursing offices located throughout the United States.
Claimability: The length oftime a payee can present a claim of nonreceipt, loss, or theft of a U.S.Government check.
Declined check: Any checkpresented for payment that Treasury will not honor because of a prior notice ofa doubtful question of law or fact.
Disbursing officer (DO): Anemployee 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 overseasalso are referred to as USDOs and are authorized to disburse funds in both U.S.dollars and in foreign currency.
Due or entitled: The conditionwhere the entire proceeds of a check are due and payable to a payee or thepayee’s estate.
Holder-in-due-course: Anindividual who, in good faith, takes possession of a check throughendorsem*nt. 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 thatremains outstanding 12 months after the date of issuance.
Mutilated check: A check fromwhich large portions are missing. Such check is treated as“unavailable” for cancellation purposes.
Nonreceipt: The payee allegesa check of entitlement was not received and requests a replacement check.
Not due or not entitled: Thecondition where all or part of the proceeds of a check are not due and payableto the payee or the payee’s estate.
Original check: The initiallyauthorized physical check for which a claim of either nonreceipt, loss, theft,destruction, or mutilation has been received.
Outstanding status: A check isidentified as outstanding when it has been reported as issued in TCIS but hasnot yet been paid.
Paid status: A checkidentified as paid that has been presented to the U.S. Treasury for paymentthrough the banking system.
Payability: The length of timea U.S. Government check can be negotiated to a financial institution.
Recertified payment: A paymentof a new numbered (not a substitute) replacement check issued to a recipientbased on a claim of nonreceipt, loss, theft, destruction, or mutilation of anoriginal check. Such payments may be vouchered at the disbursingoffice’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 checkreturned to the possession of a Department of State certifying or disbursingofficer after an unavailable check cancellation action has been taken.
Regional disbursing officer:Treasury employees who serve as “Directors” of regional officesthroughout the United States and are authorized to disburse funds for othergovernment agencies.
Status: The payment status ofan issued check, whether outstanding or paid, according to Treasury records.
Treasury check information system(TCIS): TCIS records and reconciles U.S. Treasury payments and allowsusers 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, andinstructions concerning financial management in the Federal Government.
Unavailable check: A U.S.Treasury check not in the possession of a Department of State certifying ordisbursing officer.
Unavailable check action: Theaction taken to:
(1) Determine the payment status of a check on whichsubsequent action will be based; and
(2) Initiate retrieval of a check photocopy via TCISto obtain a copy of a check that has already been paid.
Undelivered check: A checkthat is in the possession of either a Department of State certifying ordisbursing officer which has not been delivered to the payee.
4 FAM 341.4 Designation forDisbursing
4 FAM 341.4-1 U.S. DisbursingOfficer (USDO)
(CT:FIN-454; 08-07-2019)
The Chief Disbursing Officer of the Treasury Departmentdelegates disbursing authority to the Department of State in accordance with 31U.S.C. 3321. Department of State U.S. citizen employees are assigned to CGFSCharleston or CGFS Bangkok and designated as a USDO by the Comptroller andAssistant Secretary, CGFS.
4 FAM 341.4-2 Assistant USDODesignation
(CT:FIN-454; 08-07-2019)
a. An assistant USDO may be designated and authorizedto draw checks on the Treasury in the name of the USDO for whom thedisbursem*nts will be made.
b. The USDO, through the Director, Global DisbursingOperations, can request the Comptroller and Assistant Secretary, CGFS, todesignate assistant USDOs. The assistant USDOs can act on behalf of the USDOduring the USDO’s temporary absence or incapacity. Where circ*mstanceswarrant, assistant USDOs can actively assist the USDO in managing dailydisbursing operations. Assistant USDOs perform the same duties and functionsas the USDO.
4 FAM 342 CONTROLS AND USE OF TREASURYCHECKS
4 FAM 342.1 Management Controls
(CT:FIN-454; 08-07-2019)
This section is designed to comply with standards for asystem of internal control as required by the Federal Managers’ FinancialIntegrity Act of 1982 (31 U.S.C. 3512(b)) and Competitive Equality Banking Actof 1987, Public Law 100-86. Control over disbursing and accounting functionsas they relate to government check issuance and related activities must providefor achieving the proper conduct of Department of State business, fullaccountability for resources made available, and reviews to facilitate checksand balances against waste, fraud or abuse. Operating procedures andmanagement control systems must reasonably ensure that the following objectivesare achieved:
(1) Appropriate organizational plans must be providedto segregate functional responsibilities;
(2) Revenues and expenditures applicable to theDepartment’s financial operations must be properly recorded and accountedfor to permit the preparation of reliable financial and statistical reports;
(3) Sound accounting practices must be exercised inthe performance of duties; and
(4) Operational responsibilities must be commensuratewith personnel qualifications.
4 FAM 342.2 Use, Issuance andNegotiability of Treasury Checks
4 FAM 342.2-1 Use of TreasuryChecks
(CT:FIN-490; 02-29-2024)
a. Treasury checks will be used to pay obligations ofthe Department of State and serviced agencies; and to purchase U.S. dollars orforeign currency for disbursing purposes when payment cannot be made viaelectronic funds transfer. USDO checks will be drawn on the Treasury’sGeneral account or on a designated depositary.
b. U.S. Treasury checks are prohibited from being sentto a foreign country from the United States, when it is determined that postal,transportation, or banking facilities do not reasonably ensure that the payeewill receive the check or be able to negotiate it for full value.
c. See 4 FAM 311.5 for the Department’s policy on electronicfunds transfer (EFT).
4 FAM 342.2-2 Issuance ofTreasury Checks
(CT:FIN-454; 08-07-2019)
a. Check issue payments will be made on the basis of acertified voucher or Voucher and Schedule of Payments and carried-out inaccordance with the policies established herein. The over-all check issuanceprocess will be affected through use of management control procedures forfinancial operations and must not be reliant on USDO functions or the reviewand examination of vouchers.
b. U.S. Government checks carry the legend VOID AFTER 1YEAR. The payee should return the expired check to the disbursing office thatauthorized the payment.
4 FAM 342.2-3 Negotiability ofTreasury Checks
(CT:FIN-454; 08-07-2019)
All checks drawn on the Treasurer of the United Statesmust be negotiated within 12 months after the date of issue. Treasury cancelsU.S. Government checks that have not been negotiated 14 months after issue.Valid claims against checks canceled by Treasury may be re-submitted forcertification and issuance of a check(s).
4 FAm 343 REQUISITIONING, PREPARING,AND MAINTAINING TREASURY CHECKS
4 FAM 343.1 USDO Manual SignatureSpecimens
(CT:FIN-454; 08-07-2019)
a. A newly designated USDO must forward specimens oftheir manual signature to Treasury, BFS prior to issuing any U.S. Governmentchecks. A manual signature must show a reasonably uniform agreement with thestandard signatures on file with Treasury. Any USDO who elects to change theform of their signature must submit new specimen signatures to Treasury, BFS.
b. A disbursing officer may designate an assistantdisbursing officer to sign checks drawn on Treasury in the name of thedisbursing officer. The disbursing officer forwards the original designationform and specimens of the assistant disbursing officer's manual signature tothe agency official responsible for maintaining specimen signature files. Anassistant USDO's signature must appear below the printed, typed, or stampedtitle 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 afacsimile signature. The request must be regarded as including an assurance,whether stated or not, that safeguards against unauthorized use of thefacsimile signature are provided. In addition, the USDO must submit twocertified and twelve plain specimen impressions from each signature plate forapproval to Treasury, BFS. A notice of approval from Treasury must be in theUSDO’S possession before any of the facsimile plates are used to signchecks. The plates must be numbered in sequence in the lower left cornerbeginning with the number “1” unless another system ofidentification is approved by Treasury. Alternate systems must assure controlof the plates.
4 FAM 343.2-2 Internal ControlsOver Facsimile Signatures
(CT:FIN-490; 02-29-2024)
a. Signature dies for machine or hand stamps which havebecome worn or have been withdrawn from service and which will not be usedagain must be destroyed in accordance with 4 FAH-2H-216.2. Upon destruction, a “Certificate of Destruction” mustbe prepared. The certificate must be signed by two American U.S. Governmentemployees who witnessed the destruction. An impression of the signature diemust be made on the certificate prior to destruction. The original of thecertificate must be sent to CGFS/DO and one copy of the certificate must beretained in the files of the USDO.
b. In the event a USDO’S service is terminateddue to incapacitation or death, their successormust designate two American U.S. Government employees to serve as witnesses tothe destruction of the predecessor’s signature die. The recommendedmethods of destruction include:
(1) Grinding the signature off by using a grindingwheel;
(2) Pouring rubber solvent on the signature of thedie;
(3) Cutting or slicing the signature off the die witha razor blade or knife and then burning or cutting the signature into smallerpieces; or
(4) Removing the four screws from the die plate andcutting the combination rubber/brass die plate into smaller pieces.
The destruction must be sufficient to ensure thatthe die cannot be used for producing signatures. All signature dies, afterbeing mutilated, must be disposed of as waste matter.
c. Refer to 4 FAH-2H-216.1 for safeguarding facilities for facsimile signature plates.
d. The discovery of any theft, lost or misuse offacsimile signature plates must be promptly reported to the Office of Oversightand Management Analysis Directorate (CGFS/OMA) and the Office of InspectorGeneral. CGFS/OMA must immediately notify the Treasury, BFS, SecurityDivision, stating the USDO symbol involved and complete details of the theft orloss; and a request that payment be stopped on any USDO checks that may havebeen compromised.
4 FAM 343.3 Blank Treasury Checks
4 FAM 343.3-1 Annual Estimate ofRequirements
(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 isreached. The estimate is submitted utilizing U.S. GPO Form 2431, PrintOrder-Department of the Treasury Paper Checks and Proofs, including thefollowing:
(1) USDO disbursing account symbol;
(2) Number of checks used in each of the threepreceding months, i.e. January through March;
(3) Number of blank checks on hand; and
(4) The serial number of the highest numbered blankcheck on hand.
4 FAM 343.3-2 SupplementalEstimates
(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 developmentsindicating the need for an additional supply of blank checks before the nextcheck shipment is expected, the USDO promptly forwards a supplemental estimateof the additional requirements prepared in the same manner as the annualestimate.
4 FAM 343.3-3 Receipt andAcknowledgment of Shipments of Blank Treasury Checks by the USDO
(CT:FIN-454; 08-07-2019)
a. Upon receipt of a shipment of checks, the USDOcompares the markings on the unopened packages with the notice of shipment. Ifno discrepancies are discovered, the receipt coupon provided with the notice issigned and filed in the Treasury Check Stock folder. Any discrepancy noted isreported immediately to Treasury, BFS.
b. Packages received with broken seals are promptlyverified by the USDO. After verification, the package is closed, resealed, andthe inclusive serial numbers of the checks found in the package indicated onthe outside of the package over the signatures of the USDO and the verifyingofficer. Any discrepancies in the check serial numbers (or USDO disbursingaccount symbol) disclosed by the verification are reported immediately to theChief Disbursing Officer, Treasury.
4 FAM 343.4 Custody and Control ofCheck Stocks
(CT:FIN-454; 08-07-2019)
USDO’s are responsible under the blanket bond forlosses 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 CheckStocks
(CT:FIN-454; 08-07-2019)
a. Blank checks must be kept in a combination safe orcomparable depositary, as prescribed in 4 FAH-2 H-215.
b. Blank checks must be stored in sealed packages untilneeded for use. Since checks are used in numerical sequence, only one packageshould be opened at a time.
c. Blank checks are withdrawn from stock only by theUSDO or the designated USDO assigned check stock custodian.
4 FAM 343.4-2 Control of CheckStocks
(CT:FIN-454; 08-07-2019)
a. The USDO must maintain a perpetual inventory recordof blank checks which reflects at all times the quantity (including serialnumbers) of checks in stock in sealed packages, and the quantity and serialnumbers of unwrapped checks on hand.
b. The inventory record must be verified by the USDOeach quarter. Verification must include a physical inventory of sealedpackages and unwrapped checks on hand. The verified checks inventory recordmust be signed by the USDO after necessary adjustment of any errors.
c. If at any time after its receipt and initialstorage as provided in 4 FAM 343.3-3an 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 andone of the designated verifying officers. After verification, the package mustbe closed and resealed until a determination of investigation is completed.The inclusive numbers of the enclosed checks must be indicated on the packageabove the signatures of the USDO and the verifying officer.
d. Upon a change of USDO, or upon the assumption ofresponsibility 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 inventoryrecords for authorized inspection at any time.
4 FAM 343.4-3 Missing CheckStocks
(CT:FIN-454; 08-07-2019)
Any shortage, theft, or misuse of blank checks discoveredat any time is promptly reported to the Treasury, BFS, Security Division, at(304) 480-7777. The Treasury should be provided with the check numbers andUSDO disbursing account symbol involved and request that payment be stopped.Complete details of the shortage, theft, or misuse are then reportedimmediately to the Department, Attention: Managing Director, DisbursingOperations, CGFS/DO.
4 FAM 343.5 Inscribing TreasuryChecks
(CT:FIN-454; 08-07-2019)
Efficient controls must be exercised over U.S. Treasurychecks while in the process of preparation. The controls must be designed forprotection against loss or theft, to prevent the release of imperfect checksand for prompt disclosure of any discrepancy. Inscription machinery must beselected 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 beareither:
(1) Manual signature;
(2) Approved facsimile signature; or
(3) Manual signature of an officially designatedassistant 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 transmittalsusing Connect:Direct or on level 8 magnetic tape. Treasury's preferred methodof reporting is Connect:Direct. USDOs should report via magnetic tape only ifreporting via Connect:Direct is not possible (refer to disbursing user’smanual for procedures).
4 FAM 344.2 Voided Checks
(CT:FIN-454; 08-07-2019)
a. All voided checks must be rendered nonnegotiable byplacing the legend “VOID—NOT NEGOTIABLE, NO CHECK ISSUED UNDER THISNUMBER” on the face of the checks.
b. The voided checks must be defaced and listedaccording to symbol and “from and to” serial numbers. The listingof voided checks must be reported to Treasury on Form SF-1179, Month End CheckIssue Summary, at the end of the issue month.
4 FAM 345 ENDORsem*nT AND PAYMENT OFCHECKS
(CT:FIN-454; 08-07-2019)
The Treasury has the right of reasonable time forexamination of drawee checks presented, to refuse payment of refer doubtfulclaims against checks to the Government Accountability Office for settlement.Checks are deemed to be paid by Treasury only after the first fully completedexamination.
4 FAM 345.1 Endorsem*nts
4 FAM 345.1-1 U.S. GovernmentPayee Endorsem*nts
(CT:FIN-454; 08-07-2019)
The Federal Reserve Board regulates checks endorsem*ntstandards in Regulation CC: Part 229 - Availability of Funds and Collection ofChecks. Additional Department check endorsem*nt standards follow:
(1) Specific information must be included on stampsused 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 ReserveBanks or commercial depositaries must utilize the endorsem*nt area located 1.5inches beginning at the trailing edge of the check; and
(3) The depositary bank will place its endorsem*nt inthe area beginning 3.0 inches from the leading edge and ending 1.5 inches fromthe trailing edge of the check.
4 FAM 345.1-2 AcceptableEndorsem*nt
(CT:FIN-454; 08-07-2019)
a. The only acceptable endorsem*nt of a check by oneother than the payee is that the person endorsing is doing so on behalf of thenamed payee. Such an endorsem*nt will include the signature of the endorserwith sufficient wording indicating that the endorsem*nt is on behalf of thenamed payee.
b. Checks endorsed for “collection” or“deposit only” to the credit of the named payee are acceptablewithout any signature. In the absence of a signature, the presenting bank willbe responsible for the guarantee of such checks to all subsequent endorsers andto the Treasury.
4 FAM 345.1-3 UnacceptableEndorsem*nt
(CT:FIN-454; 08-07-2019)
Endorsem*nts by other than the payee signature, regardlessof the relationship between the payee and endorser, must be presumed to be aforgery and are unacceptable for payment by Treasury. It is the responsibilityof the individual or institution accepting a check from a person other than thenamed payee to determine that such person is authorized and has the capacity toendorse and negotiate the check. Treasury may require evidence of such claimedactivity in the event of a dispute.
4 FAM 345.1-4 Endorsem*nt byFinancial Institutions
(CT:FIN-454; 08-07-2019)
a. U.S. Treasury checks endorsed by a payee andreceived by a financial institution for credit to a specific account may beendorsed CREDIT TO THE ACCOUNT OF THE WITHIN-NAMED PAYEE.”
b. Financial institutions receiving and endorsingchecks must comply with the established Federal Reserve Board standards forendorsem*nt during the collection and return process (see 4 FAM 345.1-1).
4 FAM 345.2 Checks Issued toIncompetent, Deceased or Minor Payees
4 FAM 345.2-1 Checks Issued toIncompetent Payees
(CT:FIN-454; 08-07-2019)
U.S. Treasury checks endorsed by legal guardians forpersons declared incompetent must include a statement as to the capacity inwhich they are endorsing the check. The checks will be paid by Treasurywithout submission of documentary proof of authority. Treasury may requireevidence of such claimed authority to endorse in the event of a dispute.
4 FAM 345.2-2 Checks Issued toDeceased Payees
(CT:FIN-454; 08-07-2019)
a. The right to payment of Treasury checks does notterminate with the death of a payee when endorsed by an executor oradministrator. An indication of the capacity in which the executor oradministrator is endorsing must be included as part of the endorsem*nt.
b. Treasury checks other than those issued in paymentfor redemption of currencies, principal, or interest on U.S. securities, taxrefunds and for goods and services may not be negotiated after the death of thepayee. The checks are to be returned to the issuing disbursing office. Adetermination must be made whether payment is due and to whom it may be made.
4 FAM 345.2-3 Checks Issued toMinor Payees
(CT:FIN-490; 02-29-2024)
Checks issued to minors may be endorsed by either parentwith whom the minor resides; or, if the minor does not reside with eitherparent, by the person who furnishes their chiefsupport. The person endorsing on behalf of the minor must present with thecheck, a signed statement indicating the minor’s age, residence, means ofchief support and that proceeds of the check will be used for the minor’sbenefit.
4 FAM 345.3 Power of Attorney
(CT:FIN-454; 08-07-2019)
U.S. Treasury checks endorsed by an attorney-in-fact mustinclude, as part of the endorsem*nt, proof or indication to which the attorneyis endorsing. The checks will be paid by Treasury without the submission ofdocumentation of the claimed authority, with the understanding that evidencemay be required in the event of a dispute.
4 FAM 345.4 Guaranty ofEndorsem*nts
(CT:FIN-454; 08-07-2019)
The bank and the endorser of a check presented to Treasuryfor payment must guarantee that all endorsem*nts are genuine. When the firstendorsem*nt on the check has been made by one other than the payee, thepresenting bank and the endorser must guarantee to Treasury that the endorsingperson had authority to do so on behalf of the payee.
4 FAM 346 LIMITED PAYABILITY OFGOVERNMENT CHECKS
4 FAM 346.1 Limited PayabilityProceeds
(CT:FIN-454; 08-07-2019)
a. Payees of U.S. Treasury checks have 1 year from thedate of issue to negotiate the check. Government checks that remain uncashedafter 12 months must be voided by Treasury and legally cannot be negotiated bya financial institution. Treasury will automatically cancel all limitedpayability checks 14 months after the issuance date.
b. The proceeds realized from worldwide limitedpayability cancellations are placed in the budget clearing account F3880,Unavailable Check Cancellations and Overpayments, and returned monthly byTreasury, BFS via the Central Accounting Reporting System (CARS) to the Officeof the Managing Director, CGFS/F.
c. CGFS/F must maintain strict management controls andaccountability over limited payability proceeds. Managerial controls mustinclude reviews, reconciliations, and the dissemination of transactions byAgency Location Code (ALC) and checking account symbol. Transactions areforwarded to each benefiting disbursing operation for processing.
4 FAM 346.2 Processing LimitedPayability Transactions
(CT:FIN-454; 08-07-2019)
a. Within 30 days after receipt, benefiting disbursingoperations must identify and classify detailed transactions (credits). Limitedpayability transactions are returned to the original appropriation and/orallotment from which made. A subsequent reversing entry must be made to thebudget clearing account F3880.
b. Transactions (credits) which cannot immediately beidentified will remain in the appropriate budget clearing account identified byALC or checking account symbol.
c. Transactions which constitute valid liabilitieswill be treated as accounts payable. Transactions identified as invalidliabilities such as a duplicate payment will be deobligated immediately, andfunds made available to the applicable appropriation or returned to surplusunder normal year-end procedures.
d. Transactions identified as valid liabilities and aclaim not presented within 5 years from the date of a check will be returned toTreasury through submission of the Year-end Closing Statement. Claimspresented after the funds have been returned must be restored through thenormal restoration process.
e. The validity of an available or unavailable checkclaim by a payee must be exercised through examination of the payment recordsto determine whether an earlier claim or check cancellation was processed.When examination of the records is inconclusive, a request for Treasury checkstatus inquiry must be used to support payment or nonpayment of cancellationclaims.
4 FAM 346.3 Management Controls
(CT:FIN-454; 08-07-2019)
a. Accounting managers must determine the efficiencyand effectiveness with which proceeds from limited payability checkcancellations are applied to appropriated and nonappropriated funds, and payeeclaims are processed against the proceeds. Findings must be appraised andutilized for the purpose of refining and improving procedures or internalcontrol features of limited payability and claimability of U.S. Treasury checkprocedures.
b. Managers of the budget clearing account F3880 areresponsible for an ongoing transaction analysis to determine the status oflimited payability proceeds. Action must be initiated to clear balances thathave been held in the accounts for more than 1 year. Unidentified limitedpayability transactions (credits) which remain in the budget clearing accountF3880 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 byTreasury for:
(1) Copy/information retrieval;
(2) Computer processing activities related toarchiving and retrieval;
(3) A percentage of the overall check payments andreconciliation processing;
(4) Microfilm production;
(5) Postage fees; and
(6) Record storage.
Anticipated costs will be determined and billed byTreasury at the end of each fiscal year, and the costs will be based on thevolume of requests.
b. Costs for record storage charges must be billed on afiscal year basis. Copy retrieval costs must be billed quarterly. Charges forcopy requests must be re-evaluated at the end of the third quarter of eachfiscal year and will be based on the number of requests processed during thecurrent fiscal year. Treasury will advise the Department on the copy requestcharge 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 FraudReferral
(CT:FIN-454; 08-07-2019)
a. The United States Secret Service will perform aninvestigation on a case-by-case basis when forgery or fraud is indicated. Asingle case referral must total more than $25,000 in forged or fraudulentissued checks. Cases which cannot be handled according to TFM, Volume 1, Part4, Section 8070, may be referred by a USDO to the Secret Service, 1800 GStreet, NW, Washington, DC 20223, for investigation.
b. Valid claims or replacement checks are paid inaccordance with TFM, Volume 1, Part 4, Section 8070.
4 FAM 346.5-2 Check ForgeryInsurance Fund
(CT:FIN-454; 08-07-2019)
a. The Treasury, in accordance with TFM, Volume 1, Part4, Section 8070, must pay from the “Check Forgery Insurance Fund”to a payee or special endorsee of a check drawn on a depositary designated byTreasury, the amount of the check without interest if:
(1) The check was lost or stolen through no fault ofthe payee;
(2) The check was negotiated and paid by Treasury on aforged endorsem*nt; or
(3) The payee was not involved in any part of theproceeds of the check negotiation or payment.
b. Treasury is responsible for depositing to the creditof the “Check Forgery Insurance Fund” any amount recovered from aforger.
4 FAM 346.5-3 Limitation onReclamation Actions and Claims (Fraud)
(CT:FIN-454; 08-07-2019)
U.S. Treasury checks paid over a forged or unauthorizedendorsem*nt may be reclaimed from the presenting bank or any other endorserthat has breached its guarantee prior to:
(1) The end of the 1-year period beginning on the dateof payment; or
(2) The expiration of the 180-day period beginning onthe close of the 1-year period.
4 FAM 346.5-4 ProcessingGovernment Checks
(CT:FIN-454; 08-07-2019)
a. Federal Reserve Banks may cash Treasury checks drawnon the order of USDOs. USDO checks are not refused for payment unless theyhave been altered or forged.
b. Each Federal Reserve Bank will charge the amount ofchecks cashed to the account of the Treasury. Any check that Treasury refusesto pay will be photocopied and returned to the Federal Reserve Bank. Areversal of the previously charged amount must be credited to Treasury’saccount for the refused payment.
c. Banks located outside of the United States whichare designated as depositaries and permitted to charge checks toTreasury’s General Account are governed by operating instructionscontained in a letter of authorization issued by the Treasury. Depositariesare responsible for assuming the obligation of presenting banks.
4 FAM 346.5-5 Collection forUnauthorized Endorsem*nts
(CT:FIN-454; 08-07-2019)
a. A check paid by Treasury and later found to bear anunauthorized endorsem*nt must be refunded by the presenting bank. Treasurywill have the right to recover interest and other applicable charges such asadministrative collection costs and late payment penalties that may beauthorized or required by law.
b. Treasury will issue an initial demand for refund ofthe amount of a check payment by sending a “Request for RefundReclamation” to the presenting bank. The “request” willadvise the presenting bank of the amount and the reason for the demand.
c. A protest of Treasury’s demand for refund, bythe presenting bank, must be received in Treasury no later than 90 days afterthe reclamation date. Collection action will be delayed while the protest isbeing considered. If Treasury accepts the protest, the presenting bank must benotified in writing that efforts to collect the item and any accrued interesthave been abandoned.
d. Presenting banks will be notified in writing, ofinsufficient evidence in the protest. Treasury requires the presenting bank tobear liability for the amount of the demand. If the demanded amount is notpaid by the presenting bank within 30 days of the date of decision, Treasurywill proceed to collect the amount owed by offset.
e. Treasury will promptly refund any amount offset to abanking institution when it has been determined that the bank was not liablefor an unauthorized endorsem*nt.
4 FAM 347 CANCELING, DEPOSITING ANDCLAIMS FOR U.S. GOVERNMENT CHECKS
4 FAM 347.1 Cancellation of Checks
4 FAM 347.1-1 Cancellation ofAvailable Checks
(CT:FIN-454; 08-07-2019)
a. All available checks whether due or not due thepayee or the payee’s estate, must automatically be canceled by the USDOwithin 24 hours of receipt.
b. The following legend should be inscribed on the faceof the check(s) to be canceled: “NOT NEGOTIABLE—For payment andcredit in the U.S. Treasury Account, Checking Account Symbol XXXX.”
c. Available checks which are in the possession of aUSDO must be canceled within 24 hours of receipt. Form SF-1098, Schedule ofCanceled or Undelivered Checks, will be used to initiate the cancellation.
4 FAM 347.1-2 Cancellation ofUnavailable Checks
(CT:FIN-454; 08-07-2019)
a. USDOs will take immediate steps to stop payment bymeans of TCIS on any check that has been issued but is unavailable when it islearned that the payee or payee’s estate is not entitled to all, or partof the proceeds of the check. The USDO must ascertain the disposition of thecheck and issue a notice to the payee or payee’s estate that such checksare not to be negotiated but returned to the USDO for proper handling.
b. A valid claim against any part of the proceeds oweda payee or payee’s estate may be rescheduled and a new check issued. Acopy of any check paid prior to the recording of the stop payment, will beforwarded to the USDO by Treasury.
c. The following steps will be taken when checks arepresented for payment after the request for stop payment has been received andthe “stop” entered by Treasury:
(1) Treasury will decline payment if the payee isdeceased; and
(2) If it becomes necessary that Treasury honor aclaim of a holder-in-due-course, the check will be paid and the credit that wasallowed when the check was previously treated as canceled will be reversed bymeans of FMS 3858, Claims Document. Payments over cancellation are reportedvia IPAC.
4 FAM 347.2 Nonreceipt or Loss
(CT:FIN-454; 08-07-2019)
A payee of nonreceipt, loss, or a mutilated check drawn onthe Treasury will immediately notify the USDO or FMC and request that paymentbe stopped. If the check is determined to be outstanding, the claimant will beissued 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. Asubstitute check which is returned because the original has been reportedrecovered by the payee should be stamped with the legend “NOTNEGOTIABLE—ORIGINAL RECOVERED” and together with any correspondenceare forwarded for removal of stop payment on the original check to the CDO,Treasury.
b. Substitute checks returned to Treasury for reasonsother than the recovery of the original check by the payee will be stamped withthe legend “NOT NEGOTIATED—UNDELIVERED.” This group ofsubstitute checks should be separately packaged, from those being forwarded forthe purpose of removing stop payment on the original checks, and sent to theTreasury, BFS.
4 FAM 347.2-2 Recovered Checks
(CT:FIN-454; 08-07-2019)
a. Checks recovered subsequent to treatment asunavailable cancellations or returned to the possession of the USDO succeedingsubmission of “Unavailable Check Cancellation” must not becanceled, deposited or released to the payee.
b. Checks for which Form SF-1184, Unavailable CheckCancellation, was previously submitted, are to be stamped “NONNEGOTIABLE,PREVIOUSLY TREATED AS CANCELED.” The date of the previous Form SF-1184must be forwarded to Treasury along with the checks.
4 FAM 347.2-3 Request for StopPayment
(CT:FIN-454; 08-07-2019)
The USDO must access TCIS for the purpose of placingstoppage of payment when a claim of nonreceipt, loss, theft, destruction, ormutilation of a check is received.
4 FAM 347.3 Depositing, Accountingand Reporting for Canceled Checks Proceeds
4 FAM 347.3-1 Depositing CanceledChecks
(CT:FIN-454; 08-07-2019)
Checks held may be transmitted to the depositary coveredby Form SF-215, Deposit Ticket. The deposit ticket must have a confirmeddate. Deposits must be made in advance of the close of the month to facilitatetheir being taken into accounts in the same month as the deposit. Canceledmiscellaneous payment checks issued by Treasury must be deposited at theearliest date a workable volume is on hand, but not prior to the issue date ofthe checks. Check cancellations for which immediate credit has been requestedmust be deposited immediately.
4 FAM 347.3-2 Accounting andReporting for Canceled Checks
(CT:FIN-454; 08-07-2019)
a. Accounting transactions for canceled checksassociated with Washington-held allotment programs must be reported asreductions in disbursem*nts on the monthly Statement of Transactions(Classified According To Appropriation, Fund and Receipt Account, and RelatedControl Totals). Treasury control totals disbursem*nts report, will be reducedby the amount of the deposits.
b. The USDO will report applicable transactions asconfirmed deposits on the monthly Statement of Accountability (Foreign ServiceAccount) and as reductions in disbursem*nts on the monthly Statement ofTransactions According To Appropriations, Funds, and Receipt Accounts (ForeignService Account). Refer to disbursing user’s manual for operatingprocedures.
4 FAM 347.3-3 Proceeds fromCanceled Checks
(CT:FIN-454; 08-07-2019)
a. Canceled check proceeds will be returned to theaccount originally charged or the appropriate successor account. A checkrelated to annual, multi-year and no-year appropriations will be treated as anaccount payable. An invalid liability would be available to the account orreturned to surplus under normal year-end procedures. Proceeds from a checkwhich constitute a valid liability, but a claim has not been presented within 5years from the date of issue, must be returned to Treasury through the Year-endClosing Statement. Funds must be restored through the restoration process whena claim is placed after the proceeds of a check are returned.
b. The Department will be responsible for initiatingaction to clear balances that have been held in uninvested trust, revolving anddeposit 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 thefunds; and
(4) A named individual, business, or other entity canbe identified with the item.
c. Invested accounts will retain funds from canceledchecks on their books. All records necessary to recertify any payment on anobligation represented by a canceled check must be retained by the disbursingoffice.
d. Proceeds returned due to check cancellation may notbe used to create new obligations except where the liability is determined notvalid. The use of the funds must be in strict compliance with laws governingappropriated funds.
4 FAM 348 UNDELIVERED U.S. TREASURYCHECKS
(CT:FIN-454; 08-07-2019)
The following procedures are to be followed when theDepartment 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 appropriateaccounting control at the earliest practicable date; and
(3) Eliminate the checks as continuing payables in USDOaccounts.
4 FAM 348.1 Request for Waiver
4 FAM 348.1-1 SafekeepingUndelivered Checks
(CT:FIN-454; 08-07-2019)
Each disbursing operation must prescribe procedures to beobserved for the safekeeping of checks returned as undelivered. Checks must bekept in a locked combination safe while in the custody of the USDO.
4 FAM 348.1-2 Time Limit forHolding Undelivered Checks
(CT:FIN-454; 08-07-2019)
a. Undelivered checks may be held a maximum of 6 monthsafter the month of issue. An earlier disposition is operationally beneficialto the USDO and Treasury for check payment and checking accountreconciliation. Undelivered checks should be deposited as soon aspracticable. Deposits must be made in time to be confirmed and recorded in thesame accounting month that the disbursing activity is to be reported.Undelivered checks for which no action has been taken to authorize dispositionwithin the time limit will be deposited by Treasury, for credit to theDepartment’s 8-digit ALC or 4-digit disbursing account symbol.
b. Undelivered checks returned to Treasury without aclaim, will be forwarded within 5 days after receipt to the appropriate USDOfor disposition. The benefiting USDO should determine whether the proceeds ofthe check are due or not due the payee or the payee’s estate.
4 FAM 348.2 Schedule of Canceled orUndelivered Checks
(CT:FIN-454; 08-07-2019)
a. Form SF-1098 must be used to schedule canceled orundelivered checks, the proceeds of which are due and payable to the payee orpayee’s estate. The proceeds must be credited to the appropriation orfund account from which they were originally certified. If the account cannotbe determined, the credit should be made to F3875 “Budgetary Clearing andSuspense Account” until the determination can be made.
b. Liability will be established immediately in theaccounting records for the amount of all undelivered checks credited in orderto provide for the possible subsequent payment to the payees or their estatesupon claim for the proceeds. This liability represents an unpaid obligation.Either Form SF-1098 or the regular formal documentation may be used toestablish the obligation and payable in the accounts.
4 FAM 348.3 Undelivered CheckClaims
4 FAM 348.3-1 Claims forUndelivered Checks Not Automatically Canceled
(CT:FIN-454; 08-07-2019)
Undelivered checks which are returned to the USDO orTreasury and are determined to be due and payable to the payee, or thepayee’s estate or guardian, are subject to claims for their proceeds.Claims may be received prior to the return of the check, with the returnedcheck, while the check is being held by the USDO, or at any future date.
4 FAM 348.3-2 Claims for Proceedsof Undelivered Checks
(CT:FIN-454; 08-07-2019)
Valid claims for the proceeds of undelivered checks whichhave been credited to the Department’s accounts must be recertified forpayment.
4 FAM 348.3-3 Claims InvolvingDeceased or Incompetent Payees
(CT:FIN-454; 08-07-2019)
a. Undelivered checks submitted to a disbursing officein connection with a claim for the proceeds which are due a deceased payee oran estate, or an incompetent individual, must be scheduled for deposit andapplied 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 militarypersonnel of the Government and deceased or incompetent public creditors aswell as claims involving doubtful questions of law or fact must be settled bythe U.S. Government Accountability Office.
4 FAM 348.4 Vouchering Claims forProceeds of Undelivered Checks
(CT:FIN-454; 08-07-2019)
In processing claims for the proceeds of undeliveredchecks which have been credited to Departmental accounts, the payment must be supportedby a regular disbursem*nt voucher signed by an authorized certifying officer.
4 FAM 349 RECORD OF CHECKS DEPOSITED
4 FAM 349.1 Endorsem*nt and Legend
4 FAM 349.1-1 Depositor’sEndorsem*nt on Checks Deposited
(CT:FIN-454; 08-07-2019)
a. Endorsem*nts by depositors of checks, includingchecks drawn to the order of Treasury, for deposit with the Federal Reservebanks and general depositaries for credit in the account of Treasury shouldinclude:
(1) The USDO disbursing account symbol number, or theAgency Location Code (ALC);
(2) The words, “FOR CREDIT TO THE U.S.TREASURY”; and
(3) The date of endorsem*nt.
b. Depositors must show in the endorsem*nt on checksthe same ALC as shown on Form SF-215.
c. When depositors can determine from other recordsthe date each check is deposited, the date in the endorsem*nt may beeliminated. Such endorsem*nt in form or content changes, for any reason, mustfirst be approved by Treasury.
4 FAM 349.1-2 Legend Placed onChecks Scheduled for Deposit
(CT:FIN-454; 08-07-2019)
The back of each undelivered check scheduled for depositwill be stamped “Deposit to ALC xxx” before any action is taken todeposit the checks.
4 FAM 349.2 Check Deposits
4 FAM 349.2-1 Federal ReserveBank Deposits
(CT:FIN-454; 08-07-2019)
a. Checks deposited with a Federal Reserve Bank neednot be sorted but must be accompanied by an adding machine tape or otherlisting showing the item amounts and deposit total. The Federal Reserve Bankwill credit Treasury’s General Account on the date of the deposit if theitems are received early enough to be processed that day. Department of Statedepositors must establish a schedule allowing the deposits to reach the FederalReserve Banks before the daily deadline for Government agency deposits.
b. Treasury checks exceeding $5,000 must be depositedwith the nearest Federal Reserve Bank. Form SF-215 must be prepared andtransmitted with the checks.
4 FAM 349.2-2 Depositing CanceledAvailable and Undelivered Checks
(CT:FIN-454; 08-07-2019)
Available and undelivered U.S. Treasury checks which havebeen scheduled for cancellation or deposit on Form SF-1098 are classified asrepayments and should not be included in deposits of other classes ofcollection items.
UNCLASSIFIED (U)
