4 FAH-2 H-400
PAYMENTS
4 FAH-2 H-410
DISBURSEMENTS
(CT:DOH-36; 01-06-2015)
(Office of Origin: CGFS/FPRA/FP)
4 FAH-2 H-411 INTRODUCTION
(TL:DOH-1; 06-13-2001)
This subchapter prescribes the procedures for processing
payments chargeable to U.S. dollar appropriations.
4 FAH-2 H-412 U.S. DISBURSING OFFICER
(USDO) RESPONSIBILITY
(CT:DOH-16; 08-16-2005)
a. The USDO is the only person authorized to make
direct disbursements from government funds. A USDO is authorized to make
disbursements for any item for which the USDO has a properly certified
voucher. The USDO may delegate duties but remains primarily accountable. The
payment cycle supervisor (under the supervision of the USDO) is responsible for
performing the detailed supervision of the payment cycle, including resolving
payment cycle related problems and ensuring that the proper actions are
performed by the staff at the right time.
b. Disbursements by a USDO are made by either:
(1) Automated no-check payment process approved by
Treasury which consists of magnetic tape, diskette, electronic funds transfer
(EFT), or computer listing which directs a bank to credit a vendors account
with a corresponding charge to the account of the USDO.
(2) Cash or checks, either U.S. dollar checks drawn on
the U.S. Treasurys general account or local currency checks drawn on a
designated operating account.
(3) In addition, cash disbursements by a designated
cashier may be made to accommodate payments for small purchases in accordance
with 4 FAH-3
H-390.
(4) The USDO will credit bank interest or related
charges received on all designated operating accounts to the U.S. Treasury
Gains and Deficiencies account 206763.
4 FAH-2 H-413 OBTAINING FUNDS FOR
DISBURSEMENTS
(CT:DOH-16; 08-16-2005)
The USDO may obtain funds for official disbursements by
the following methods.
(1) Use of collections, including suspense deposits
abroad.
(2) Issuance and negotiation or deposit of Treasury
checks.
(3) Exchange transactions for official purposes as
follows:
(a) Purchase of foreign currency with U.S. dollar
Treasury checks or cash.
(b) Purchase of foreign currency drafts for the purpose
of remitting payments to government creditors.
(c) Purchase of U.S. currency, checks, drafts, bills of
exchange, or other instruments representing official funds for which the USDO
is accountable.
(4) Purchase of funds from the chief disbursing
officer (CDO), Department of Treasury or other accounting officer is by:
(a) Book transfer of funds (accounting entry transfers
between accounts);
(b) Wire transfer of funds; and
(c) Shipments of U.S. or foreign currency.
(5) Funds for or from accommodation exchange
transactions as provided in 4 FAH-3 H-360.
4 FAH-2 H-414 BASIC DISBURSEMENT
REQUIREMENTS
(CT:DOH-30; 07-19-2013)
a. All disbursements, whether in cash, by check or
electronic funds transfer (EFT), for authorized and lawful payments must be
certified and supported by backup documentation. Sufficient information should
be shown on the disbursement vouchers or on documents attached thereto to
enable the audit of the transaction.
b. To prevent duplicate payments, vouchers,
voucher-schedules or computer files with associated vouchers must be identified
with a unique voucher reference number to prevent the processing of the payment
a second time.
c. Control over disbursements.
(1) The principal objectives of control over
disbursements are to insure that all disbursements are legal, proper, correct,
accurately recorded, and reported in a timely and efficient manner to Treasury,
Internal Revenue Service, fund managers, or other agencies in compliance with
existing regulations.
(2) Disbursement should be in conformity with
Department of State principles and standards for internal management control
and cash management policies.
(3) Large payments, by their very nature, are
vulnerable to being processed as materially incorrect or improper. For
example, errors have been made because payments were in the wrong currency.
The USDO will conduct a review and approve all payments over one million U.S.
dollars or the equivalent in foreign currency.
(4) The maximum amount for which an individual payment
can be issued is dependent on the type of payment instrument. Maximum
individual payment amounts for each payment instrument are as follows:
Paper check, with automated processing U.S. $9,999,999.99
Paper check, with manual processing
$99,999,999.99
ACH (automated clearing house)
$99,999,999.99
EFT
$999,999,999.99
(5) The Debt Collection Improvement Act of 1996
mandates the use of EFT for almost all federal government payments. Automated
Clearing House (ACH) is the preferred mechanism for all payment amounts less
than 100 million U.S. dollars. Large dollar payments that exceed the maximum
amounts identified above should be broken into multiple payments.
(6) A USDO disbursing large payments will report to
the Treasury in the following manner:
(a) For $50 million or more to a single payee, other than
to another government agency, the USDO will report two days prior to the
payment the name of the approving agency, the intended date of issuance, the
amount to be disbursed, the name and address of the payee (or payees bank if
the funds are so directed), and the method of disbursement.
(b) This information should be faxed to:
Funds Control Branch, Accounting Control Branch,
Financial Management Service, Department of the Treasury.
Fax Number: 202-874-9945 or 9984
Phone Number: 202-874-9789 or 9790
A copy of the information should also be sent to
CGFS/OMA.
4 FAH-2 H-415 METHODS OF DISBURSEMENT
(CT:DOH-16; 08-16-2005)
a. A U.S. dollar obligation may be paid in either U.S.
dollars or in local currency provided there is no restriction that limits the
form of payment in local currency. Payments are made by checks, electronic
funds transfer (EFT), and paper funds transfers. Systems used include the
Society for Worldwide Financial Telecommunications (SWIFT), Fed line, telex,
and bank-provided programs.
b. An obligation that is based on an amount in local
currency is normally paid in that same currency. Properly authorized payments
of local currency expense vouchers of employees may be paid in dollars provided
there is no disadvantage to the U.S. Government and no restriction by the host
country that limits payments in U.S. dollars. Payments in U.S. dollars to
locally employed staff are prohibited wherever there is a parallel (black)
foreign currency market except when the employee is travelling abroad on
official trips for the U.S. Government, or waiver has been granted.
4 FAH-2 H-416 RATE OF EXCHANGE FOR
DISBURSEMENTS
(CT:DOH-36; 01-06-2015)
a. The official USDO rate of exchange for all
currencies is listed on the International
Currency Exchange Rates website. The rate
of exchange for disbursements is the official USDO rate of exchange on the date
the payment is authorized, unless the certifying official specifies a different
rate. For payroll vouchers to local employees, the applicable rate of exchange
as of the payment processing date is used. (See 4 FAH-2 H-512
on how prevailing rate is used.)
b. The exchange rate tolerance in the system should be
set at no more than 10% for all currencies unless an extreme situation exists
in a country that would require that countrys rate to be adjusted. Vouchers
entered using more than the approved tolerance level should be flagged and
reviewed by the USDO.
c. U.S. dollar equivalents are computed to the nearest
cent, counting one-half cent and over as a whole cent.
4 FAH-2 H-417 THROUGH H-419 UNASSIGNED