UNCLASSIFIED (U)

4 FAH-2 H-420

CHECKS

(CT:DOH-30; 07-19-2013)
(Office of Origin: CGFS/FPRA/FP)

4 FAH-2 H-421 NEGOTIABILITY OF CHECKS

(CT:DOH-18; 09-29-2005)

a. All checks drawn on the Treasurer of the United States must be negotiated within 12 months after the date of issue. Treasury checks carry the legend VOID AFTER 1 YEAR. The legend serves as notice to a payee and endorser of a general limitation on the payment of government checks. Treasury will decline payment of checks not negotiated to a financial institution within one year from the issue date. (See TFM Bulletin 90-03 for further details.)

b. Checks drawn on foreign bank accounts are, in most countries, valid for one year; in others, for six months; and in some, there is no limitation.

4 FAH-2 H-422 RECEIPT AND VERIFICATION OF PAYMENT DATA

(CT:DOH-18; 09-29-2005)

Payments are made on the basis of a certified voucher received in batch files from the posts or emergency certified vouchers input directly into the disbursing system. The overall payment process is affected through use of management control procedures for financial operations and must not rely on the U.S. disbursing officer (USDO) review and examination of vouchers.

4 FAH-2 H-422.1 Electronic Certification System (ECS)

(CT:DOH-30; 07-19-2013)

a. ECS must be made available to all posts, where possible.

b. Posts electronically certify vouchers and create Form SF-1166, Voucher and Schedule of Payments, for transmission to the CGFS Charleston or CGFS Bangkok.

(1) ECS key custodians at CGFS Charleston and CGFS Bangkok issue encryption cards to the post certifying officers (normally the Information Systems Security Office (ISSO)). Cards may not be issued to any Department of State employees who are not listed on the official list of designated certifying officers from CGFS/DO or to any certifying officers from other agencies that have not been properly designated by their agency. CGFS/DO will forward the certifying officers database to the USDOs and ECS administrators on a monthly basis.

(2) The key custodians must report any violations of the encryption cards by a certifying officer to the USDO immediately.

4 FAH-2 H-422.2 Non-Electronic Certification

(CT:DOH-18; 09-29-2005)

The USDO or his designee prior to payment must examine all non-electronic payments for certification. The USDO must establish a procedure for examining the payments before they are made.

4 FAH-2 H-422.3 USDO Approvals

(CT:DOH-18; 09-29-2005)

Canceled checks (Form SF-1098, Schedule of Canceled or Undelivered Checks, and Form SF-1184, Unavailable Check Cancellation), exchange voucher transactions (Form OF-234, Exchange Transaction Voucher, and Form OF-176, Exchange Voucher), currency purchases, and journal voucher adjustments for Budget Clearing Accounts (BCA) accounts (F3875 and F3880) must be prepared and approved by the USDO. They are then forwarded to the voucher section for entry into the system.

4 FAH-2 H-423 CHECK PAYMENTS

4 FAH-2 H-423.1 Obtaining Check Stock for the Daily Payments

(CT:DOH-18; 09-29-2005)

a. A system-generated report identifies the check numbers for each bank needed for the payment process.

b. The check stock custodian:

(1) Removes the checks from the vault and deletes the check numbers from the systems accountable record following the automated system procedures;

(2) Verifies that the beginning and ending check numbers match the check numbers on the system-generated report; and

(3) Transfers the checks to the employee responsible for printing the checks.

4 FAH-2 H-423.2 Printing

(CT:DOH-30; 07-19-2013)

a. Regardless of which section at CGFS Charleston or CGFS Bangkok prints checks, separation of duties and internal controls must always be considered.

b. Efficient controls must be exercised over all checks while in the process of preparation. The controls must be designed to protect against loss or theft, to prevent the release of imperfect checks, and to promptly disclose any discrepancy. Inscription machinery must be selected upon the basis of its capability to draw checks.

4 FAH-2 H-423.3 Signing

(CT:DOH-18; 09-29-2005)

a. Each check issued by a USDO must bear either a manual signature, an approved facsimile signature of the USDO, or the manual signature of an officially approved assistant USDO (only the principal USDO will receive a facsimile signature die). Even though the Treasury will accept a manual signature on a Treasury check, some banks will not. If the assistant USDO manually signs a check, he or she must be sure that the bank will accept the signature.

b. The USDO or designee reviews the checks to verify that all checks are signed and that no checks are missing. A system-generated listing identifies the number of payments made for each bank code. The USDO or designee verifies that the number of checks signed agrees with the list by signing the report. The valid signed checks are passed to the payments supervisor or designee for distribution.

c. The USDO or designee returns the signature die to its secured storage area (safe).

4 FAH-2 H-423.4 Voided, Excess or Damaged Check Stock

(CT:DOH-18; 09-29-2005)

a. Check stock issued that is excess to the payment requirements (including the header and trailer) or is damaged during the check printing or signing process, are stamped VOID and returned to a person other than the one printing or signing the checks.

b. The check stock custodian verifies that all checks removed from inventory are accounted for as either issued or voided checks. The check stock custodian reconciles the count with the system-generated check report and enters the voided, damaged or excess checks into the automated accounting system.

c. The voided checks are then delivered with an inventory listing to the USDO or designee for disposal. The USDO then destroys the checks by shredding. Shredded fragments must not be larger than 1/4-inch in width and 3-1/2 inches in length. The USDO or designee signs the inventory list, confirming destruction of the voided checks.

4 FAH-2 H-423.5 Distribution and Mailing

(CT:DOH-30; 07-19-2013)

CGFS Charleston and CGFS Bangkok may have different procedures for distributing and mailing checks. Checks should be separated appropriately and organized for mailing in accordance with the established procedures for that CGFS office. Unique or specific requirements for mailing checks should be written and available to all staff responsible for distribution.

4 FAH-2 H-424 Electronic funds transfer (EFT) PAYMENTS

(CT:DOH-30; 07-19-2013)

The USDO should require EFT payments where possible. The payee must provide required bank information and other personal data, which is then entered into a profile and assigned a unique code (debtor and/or creditor in the financial management system. These codes are used when payment requests are made at the post and must match those in the reference tables at CGFS Charleston or CGFS Bangkok. Details on these codes may vary between USDOs and systems. The USDO or disbursing staff must inform their serviced posts of the specific procedural requirements prior to processing any EFT payments for that particular payee.

4 FAH-2 H-424.1 U.S. Dollar EFT Payments

(CT:DOH-30; 07-19-2013)

a. Fedline.

(1) Fedline is a personal computer (PC) based electronic delivery system that provides access to the Federal Reserve System, its services, and information. Fedline provides the physical means to transfer funds between CGFS Charleston or CGFS Bangkok and the automated clearing house (ACH).

(2) The USDO is responsible for establishing and maintaining the controls as specified in the Fedline security policy described below.

(a) The information system security officer (ISSO) at CGFS Charleston or CGFS Bangkok is the local security administrator for Fedline operations at that location.

(b) The ISSO will control and assign local user identifications and will coordinate the action required to obtain a host user code and password for each user from the Federal Reserve Bank (FRB).

(c) Following a written request from the USDO, the ISSO will assign the applicable local access controls and access levels to assure that no one person has the ability to load and send a Fedline transaction.

(d) The Fedline system will be configured so that data can only be imported into the system. Such input must be from the official financial system or other duly certified request. Data required to complete reversals or reclamations may be entered directly into the Fedline system, but must follow established procedures and controls (see 4 FAH-2 H-427.3-1, paragraph b).

(e) No Fedline transactions will be made without supporting documentation.

(3) Creating the Fedline payments file in the financial management system.

(a) Approved vouchers to be paid by EFT are identified by the splitter program that splits the vouchers according to type. During payment authorization, EFT payment records are added to the EFT master file. The EFT conversion job stream will extract these records, and then convert them to a format for the receiving records from the financial institution.

(b) Accounting/Disbursing Program (ACDP). The ACDP.003, Standard Payment Proof list, shows all transactions selected for payment, arranged by payment medium. EFTs included on the proof list will be added to the EFT master file during payment authorization. Later, the transactions will be extracted and converted to the bank files.

(c) Payment authorization produces five reports, one of which is the EFT confirmation report, ACDP.023, which lists all EFT payments added to the EFT master file.

(d) The ACDP.023 EFT confirmation report should be compared to the ACDP.003 Standard Payment Proof list to make sure that the payee name, amount of payment, payment ID number, batch ID, and the voucher number match.

(e) Although EFTs are approved and authorized during the payment cycle, the EFT conversion job stream must be run outside of the payment cycle.

(f) A routine in the EFT conversion job program calculates a hash total. The hash total is a number derived from a summation of selected data elements in all records of a bank format file and stands as a unique identifier for the bank format file.

The hash total is a point of comparison in the hash verification program, which is run to ensure that copied data remains intact prior to transmission from CGFS Charleston or CGFS Bangkok to the receiving financial institution. The PC hash verification program is run after the bank format file has been extracted during the job stream, downloaded to a PC text file, and copied to a diskette. This program verifies that data in the bank format file has remained intact during its download and copy. It reads and stores the hash total on the bank format file, runs a calculation on each individual record, then compares the calculated hash total with the stored hash total.

If the hash totals match, the program creates a transmittable EFT file as output. If the totals do not match, an error message is generated and no output file is created.

(g) Access to the EFT processing menu should be strictly controlled. In the financial management system, running the EFT conversion job stream or voiding EFT, originate from the EFT processing menu, which is accessed from the financial management system disbursing main menu.

(h) Following the successful running of the PC hash verification program, the CGFS computer operator takes the diskette and loads it into a PC with a modem running the Fedline software. The PC running the Fedline software transmits the bank format file to the Federal Reserve Bank (FRB) or other designated ACH. Batches of records defined by payment date and type are recorded in the bank format file.

(4) Fedline security procedures.

(a) Each CGFS office will establish and follow procedures to document Fedline payments made through the ACH using the ACDP. The Fedline payment confirmation (which is usually received two hours after the payment is sent) will become a supporting document for the Fedline payment. An individual who is not involved in either entering or approving the file will review the Fedline transactions on a daily basis. All related documents should be maintained as supporting documentation for the payment.

(b) The person performing the Fedline or other EFT procedure may not process a payment to his or her own personal account. Another person with system access will make Fedline or EFT payments to the person operating the program. If this is not possible, the ACDP should be annotated that the payment is proper and signed by the USDO (or the assistant USDO if the payment is for the USDO).

(c) The USDO will, in cooperation with the ISSO, ensure that two employees are required to complete the process of importing files into Fedline and sending the files to the appropriate bank. One employee and an alternate should be responsible for importing the files into Fedline, and the USDO and an assistant USDO (as the USDO alternate) should be responsible for sending the files to the FRB.

(5) The Fedline batch is REJECTED by the FRB for the following reasons:

(a) The transmitted file is not an ACH file;

(b) The control totals do not match;

(c) The standard entry class code is invalid;

(d) The service class code is invalid;

(e) The batch totals do not match the detail records total; or

(f) The transmission was distorted.

(6) Notification of Change (NOC). NOCs correct or change account information in a payment entry the FSC has processed through ACH. NOCs are received through Fedline II as part of the processed incoming messages from the FRB. They should be printed each day and corrections should be processed as soon as possible based on system availability. The standard reason codes used to identify errors are:

(a) C01 - Incorrect Account Number;

(b) C02 - Incorrect Routing Number;

(c) C03 - Incorrect Routing Number and Account No.;

(d) C05 - Incorrect Transaction Code;

(e) C06 - Incorrect Account No. and Transaction Code; and

(f) C07 - Incorrect Routing No., Account No., and Transaction Code.

It is important to remember that the payment that caused the receiving institution to issue the NOC to CGFS Charleston or CGFS Bangkok contained enough information for the receiving institution to manually process. However, this manual processing caused at least a one business day delay in the receipt of funds by the payee. Processing the NOC will correct CGFS maintained records and allow future payments to this recipient to process faster without manual intervention or delay. NOCs should also be passed to the post so that post maintained records can be corrected.

b. Using proprietary bank software for U.S. dollar EFTs (non-Fedline).

(1) U.S. dollar EFT payments made to U.S. dollar bank accounts overseas cannot be made by Fedline (these are currently only for domestic dollar bank accounts).

(2) The USDO may make U.S. dollar EFTs from their International Treasury General Account (ITGA) account, using software supplied by the bank if supported by the CGFS software. Normally the receiving bank charges a lifting fee for this service, which must be paid by the vendor. The USDO arranges for the payment of any fees required to assure that the net amount of individual payroll payments is credited to the individual employee account. The USDO is not authorized to pay for fees related to maintenance of the individuals bank account.

(3) All U.S. dollar EFT payments must be made in consideration of the strict controls implemented for Fedline EFT payments. The USDO must have established and written procedures with proper internal controls. The ISSO must review these controls once a year during their annual review and report of system internal controls.

4 FAH-2 H-424.2 Local Currency EFT Payments

(CT:DOH-30; 07-19-2013)

EFT local currency payments can only be made if the local bank has the capability to receive batch payments from the USDO. The USDO obtains proprietary software from their local bank, and makes the payments directly from the USDO local currency account. When a new software program becomes available in a country, the USDO makes arrangements for its installation at CGFS Charleston or CGFS Bangkok.

(1) Each banks software requires a different file format, so CGFS Charleston or CGFS Bangkok must modify the local currency output file created by the disbursing system to be compatible with the banks format.

(2) There must be adequate separation of duties and effective checks and balances for creation and transmission of the EFT local currency payments. This separation of duties should be consistent with the software constraints or capabilities of the local bank.

(3) For every banking software program used to process local currency EFTs, the USDO must establish written procedures (including any required instructions to banks such as faxed confirmations when the file has been sent, etc). The procedures must ensure that internal controls and edits are in place to prevent fraudulent payments from being processed.

4 FAH-2 H-424.3 SWIFT EFT Payments

(CT:DOH-30; 07-19-2013)

The USDOs are moving towards the Society for Worldwide Inter-bank Financial Telecommunications (SWIFT) MT101 as the main form of foreign currency EFT payments. SWIFT is a very secure private intranet between banks. It supplies secure messaging, interface software and 24-hour global support to over 6,000 financial institutions in 164 countries. Each CGFS office will establish and follow procedures to document payments made through SWIFT. These procedures must take into consideration internal control safeguards consistent with any software constraints of the program.

4 FAH-2 H-424.4 EFTs Made By Remote Check Printings

(CT:DOH-30; 07-19-2013)

a. Some banks are unable to make EFT payments to individual payees but are able to receive an instruction for all individual payments. In these situations, the USDO has made arrangements to send a global instruction to the bank for the total amount of the payments along with a list of all the individual payments. The bank then prints checks for each of the payees on the list and distributes the checks to the payees. In some instances the bank may make recipient payments in cash or by crediting debit card or similar accounts.

b. For purposes of statistical collection of payment data, each remotely printed check is considered an EFT payment.

c. Each CGFS office must establish written procedures and controls for transmission where remote check printing is used. Bank reconciliation must be considered when developing a memorandum of understanding with the local bank for this service to ensure adequate information on the checks is received back from the bank.

d. The USDO will report the total of all EFT and check payments made. These totals are to be compiled in a monthly report, and then forwarded to CGFS/OMA for review.

4 FAH-2 H-425 EMERGENCY PAYMENTS

(CT:DOH-30; 07-19-2013)

a. Introduction.

(1) An emergency is defined as an event that could not be foreseen by the financial management officer (FMO) and in which it is critical that payment be made within 24 hours. All emergency payment requests must be approved by the USDO prior to processing. The request must be made to the USDO via cable and must provide adequate justification, information, and documentation for approval and processing of the payment.

(2) CGFS Charleston and CGFS Bangkok policy is, in general, not to process emergency manual checks. The process of manually preparing an emergency check requested via cable from the post to CGFS Charleston and CGFS Bangkok is outside the internal controls provided by the financial management system. The time required to prepare, send, and process the payment after receipt of the cable often takes longer than the time required to process the check through the normal system process.

(3) It is, however, recognized that there will be a continuing need for emergency payments. These genuine emergency payments should be processed by an EFT or instructions to the USDOs bank to make a payment to the person or company requested by the post. There may be circumstances where recurring payments need to be processed as emergency payments, but these are to be negotiated in advance between the FMO and the USDO. For example, there is a requirement that social security payments for Foreign Service National (FSN) employees in Santiago, Chile, be made within three days after the amount is known. In such instances, the FMO and USDO should discuss if there are payment methods within the established internal controls of the financial management system.

b. Processing Emergency EFT.

(1) An emergency EFT is normally made by sending a wire transfer to the cashier, increasing their advance for the amount of the payment. The cashier then makes the emergency payment based on a certified voucher that decreases the cashiers advance appropriately.

(2) The USDO may make emergency EFT payments directly to a vendor if adequate bank information is available. Each CGFS office must have an established policy on emergency EFTs with procedural guidance. Applicable guidance should be provided to the serviced posts.

(3) There must also be established procedures to ensure the EFT is entered into the system properly and that bank and cashier reconciliation is completed, including all emergency checks.

4 FAH-2 H-426 VOIDING PAYMENTS

(CT:DOH-18; 09-29-2005)

Voided, excess or damaged checks must be returned to the check stock custodian, who verifies that all checks removed from inventory are present or accounted for. The check stock custodian enters the voided checks into the system, and then delivers them to the USDO or designee (with an inventory list) for disposal of the checks. The USDO or designee destroys the checks as soon as possible by either shredding or incineration. Shredded fragments must not be larger than inch in with and 3 inches in length. For additional information on checks voided after processing of daily payments (see 4 FAH-2 H-423.4).

4 FAH-2 H-427 CANCELING PAYMENTS

4 FAH-2 H-427.1 U.S. Dollar Treasury Check

4 FAH-2 H-427.1-1 Available U.S. Dollar Treasury CheckThe USDO

(CT:DOH-18; 09-29-2005)

a. Receives Form SF-1098, Schedule of Canceled or Undelivered Checks, from the post requesting that a check be canceled. The check should be attached and affixed with NOT NEGOTIABLEFor Payment and Credit in the U.S. Treasurys Account.

b. Cancels all available checks within one business day of receipt.

c. Requests a refund.

d. Annotates related vouchers or payment records with the reason for the cancellation.

e. Notifies post of the cancellation. Post will prepare another certified voucher to process payment.

f. Prepares a journal voucher to refund the funds to the original accounting data.

4 FAH-2 H-427.1-2 Unavailable U.S. Dollar Treasury CheckThe USDO

(CT:DOH-18; 09-29-2005)

a. Telegraphically receives Form SF-1184, Unavailable Check Cancellation, from post or notification from payee that a check has not been received, is lost, or stolen.

b. Determines status of check through the payment, claims and enhanced reconciliation (PACER) system. If the check has been negotiated, a digital image is furnished of the check with the payees signature. If the check has not been negotiated, a stop payment is processed and Treasury issues a refund through the Intra-Governmental Payments and Collections (IPAC) system.

c. Prepares a journal voucher to transfer the refund to the original accounting data after receipt of the hard copy of the IPAC refund for the non-negotiated check.

d. Notifies post when stop payment is processed. If the check has not been paid and the proceeds are still due the payee, post initiates a new voucher containing the same information.

4 FAH-2 H-427.2 Local Currency Check

4 FAH-2 H-427.2-1 Available Local Currency CheckThe USDO

(CT:DOH-18; 09-29-2005)

a. Receives a request from the post requesting that a local currency check be canceled. Treasury Form SF-1098, Schedule of Canceled or Undelivered Checks, is not required, but necessary information to complete the cancellation must be submitted. The check should be attached and affixed with NOT NEGOTIABLE.

b. Obtains related vouchers or payment records with information on the original payment. Prepares a journal voucher to return the funds to the original accounting data.

c. Cancels all available checks within one business day of receipt. Keeps a record of all canceled local currency checks.

d. Notifies post of the cancellation. If post wants to reissue the check, they will prepare another certified voucher to process payment.

4 FAH-2 H-427.2-2 Unavailable Local Currency CheckThe USDO

(CT:DOH-18; 09-29-2005)

a. Notifies the bank, in writing, to stop the payment when notification is received that a local currency check has been lost, stolen, or otherwise needs to be canceled. The form of the stop payment request should be in conformance with the local prevailing practice set by the government.

b. The stop payment request can be sent directly to the bank by the USDO or sent to the post for presentation to the bank. The USDO may also delegate in writing to a post the authority to request the stop payment. In this situation, a letter signed by the USDO to the bank giving this authority to the post to cancel checks issued on their bank account is required. If post requests a stop payment, the USDO must be notified immediately.

c. The stop payment request should ask for a confirmation that the check has not been paid and that a stop payment is in effect.

d. Initiates a journal voucher to refund the funds to the original accounting data after the stop payment confirmation is received or the check becomes available. The available check is stamped CANCELED and retained in a file for three years.

e. Notifies post when stop payment is processed. The post initiates a new voucher if the check has not been paid and it appears that the proceeds are due the payee.

4 FAH-2 H-427.3 EFT Cancellations

4 FAH-2 H-427.3-1 U.S. Dollar EFT

(CT:DOH-30; 07-19-2013)

a. Fedline payment cancellations.

(1) Once an EFT has been processed by the USDO, it cannot be canceled but may be rejected by the bank. Normally, this type of reject is received by the USDO within 24 hours of the transmission. If the USDO is notified that the EFT was unsuccessful (rejected by the receiving bank), the EFT is returned to the USDO with a reason code. The USDO then credits the amount of the EFT back to the post appropriation and advises that corrective action must be taken prior to reissuing the EFT. To maintain the integrity of the processing system, the USDO cannot change data within the EFT payment file.

(2) If a payee has not received payment within three working days of the time the voucher was submitted by the post, the post should contact the USDO. The USDO first reviews its records to determine if the payment was made through Fedline. If the FRB verifies that the payment was not returned or canceled, the USDO or his or her designee should contact the bank to verify the following information:

(a) Person making the call;

(b) Schedule number;

(c) Financial institution;

(d) File submission date;

(e) Payment amount and date;

(f) Payee name and account number; and

(g) Trace Number.

(3) If the financial institution returned the payment, the FRB will return the payment to CGFS Charleston or CGFS Bangkok. In this case, the USDO initiates Form SF-1098 to cancel the payment.

(4) If the financial institution indicates that there is no record of the payment, the USDO contacts the FRB to verify whether or not the payment was sent to the financial institution. If the FRB sent the payment, the USDO contacts the financial institution to resolve the claim. If the FRB did not receive the payment, each payment will be handled on a case-by-case basis until the problem is solved.

b. Fedline reversals.

Reversal: Once an entry or file is deposited into the ACH system, it cannot be recalled. However, if a duplicate or erroneous file has been deposited, the file can be reversed. The USDO should immediately contact the FRB for instructions. A single entry can be reversed using Fedline. The USDO may also contact the receiving financial institution and request they return the funds.

c. By bank proprietary software (non-Fedline).

(1) As with U.S. dollar EFTs, once an EFT has been processed by the USDO, it cannot be canceled. Normally, this type of reject is received by the USDO within 24 hours of the transmission. However, if the USDO is notified that the EFT was unsuccessful (rejected by the receiving bank), the EFT is returned to the USDO with a reason code. The USDO then credits the amount of the EFT back to the post appropriation and advises that corrective action must be taken prior to reissuing the EFT. To maintain the integrity of the processing system, the USDO cannot change data within the EFT payment file.

(2) If a payee has not received payment within four working days of the time the voucher was submitted by the post, the post should contact the USDO. The USDO first reviews its records to determine if the payment was transmitted to the bank. If the USDO records show that the payment was made to the bank, the USDO or his designee should contact the bank to verify that the payment was not returned or canceled. The following information should be verified with the bank:

(a) Person making the call;

(b) Schedule number;

(c) Financial institution;

(d) File submission date;

(e) Payment amount and date; and

(f) Payee name and account number.

(3) If the bank returned the payment, the USDO initiates the payment cancellation in the system.

(4) If the bank indicates that there is no record of the payment, the USDO should resolve the claim. Each payment will be handled on a case-by-case basis until the problem is solved.

4 FAH-2 H-427.3-2 Local Currency EFT

(TL:DOH-1; 06-13-2001)

a. By bank proprietary softwareLocal currency EFT cancellations should be handled the same as for the U.S. dollar EFT cancellations made through bank proprietary software (4 FAH-2 H-427.3-1).

b. By SWIFTSWIFT cancellations should be handled the same as U.S. dollar EFT cancellations made through bank proprietary software
(4 FAH-2 H-427.3-1).

4 FAH-2 H-427.4 Fraudulent or Altered Checks (Forged)

4 FAH-2 H-427.4-1 U.S. Treasury Checks

(CT:DOH-30; 07-19-2013)

a. When Treasury receives a check that is printed for an amount different from the reported amount on Form SF-1179, Month End Check Issue Summary, tape, Treasury issues a Form FMS-5206, Advice of Check Issue Discrepancy, report and forwards it to the USDO. Immediately upon receipt of the Form FMS-5206, the USDO determines what amount the check was issued for and contacts CGFS/OMA for assistance.

b. If it is determined that the Treasury check was forged, the USDO should complete the claim Form FMS-1133, Claim Against the United States for the Proceeds of a Government Check, in accordance with 4 FAH-2 H-427 and forward it to CGFS/OMA. CGFS/OMA will advise the USDO when approval is given to reissue the settlement check. The USDO is authorized to charge account 20X4109, United States Treasury Check Forgery Insurance Fund, for the amount after approval of the claim.

c. If Treasury makes a recovery of the forged check through its reclamations process, Treasury will credit the account to which the settlement check was charged (20X4109). The USDO will be advised if further action is required.

d. The USDO must notify the Office of Inspector General (OIG) of any fraudulent or altered checks.

4 FAH-2 H-427.4-2 Local Currency Checks

(CT:DOH-30; 07-19-2013)

a. If a local currency check is altered, the USDO will immediately place a stop payment with the local currency bank and obtain a copy of the check.

b. The USDO should send a letter (telex) to the bank asking for credit to the account in the amount of the fraudulent check. The letter should explain how the check was altered and how it was discovered.

c. If the bank agrees to credit the account, the USDO should then issue the check from the credit. If they do not agree, the bank must send a letter to the USDO stating their refusal to credit the account.

d. The USDO is authorized to charge account 20X4109 for the amount of the forged check if the procedures below are followed. The check should not be outstanding more than one full fiscal year following the fiscal year in which it was issued.

(1) A copy of the Form FMS-1133 can be obtained through the unavailable check cancellation process.

(a) Change address at the top of the form page 1 to read applicable CGFS Charleston or CGFS Bangkok address vice Treasury.

(b) Type the complete name and current address of the claimant in the address area.

(c) Insert the payees name and complete address as shown on the paid check, the check number, date of issue, and the amount of the check in the boxed space.

(d) Change wording on line 12 (first line after item 3) to read CGFS Charleston or CGFS Bangkok address vice Treasury.

(e) Delete from last paragraph by the United States Secret Service.

(f) Change signature block at bottom right from director, operations division to USDO Symbol, CGFS Charleston or CGFS Bangkok.

(2) Forward the form to the vendor (payee) and request the vendor answer all the questions and return the form back to the USDO. If the claimant does not reply to Form FMS-1133 within 90 days, CGFS Charleston or CGFS Bangkok should consider the case closed.

(3) Disbursing officer should forward a copy of the voucher and all supporting documentation under a cover letter explaining the circumstances to CGFS/OMA.

(4) CGFS/OMA will review the documentation and approve or disapprove the claim based on completeness of the required documents.

(5) Upon approval, the USDO will notify the post that they may issue a settlement check to the owner and charge account 20X4109.

(6) The settlement check must be made payable in the same currency as the original check. The check should be issued with the current date and information in the lower left corner identifying the original check as follows:

Issued in lieu (or in settlement) of Check No.__________

Date ___________ Drawn by_______________________

The settlement check number will be recorded on the reverse of the claim.

(7) All documentation on the check reissue must be submitted to Treasury within one business day of issuing the check. Documentation should be sent first to CGFS/OMA for forwarding to Treasury. Treasury maintains the complete file on items charging account 20X4109.

(8) All charges to account 20X4109 must be reported by the disbursing officer on Form SF-1221, Statement of Transactions According to Appropriations, Funds, and Receipt Accounts (Foreign Service Account).

4 FAH-2 H-427.5 Expired Check

4 FAH-2 H-427.5-1 U.S. Dollar Treasury Check Limited Payability Cancellation

(CT:DOH-30; 07-19-2013)

a. Treasury automatically cancels a government check that has not been negotiated to a financial institution within one year from the issue date. Limited payability was established by Title X of the Competitive Equality Banking Act of 1987, Public Law 100-86 (31 U.S.C. 3328), and applies to all Treasury checks dated October 1, 1989, and after.

b. During the 14th month after issuance, Treasury will identify and cancel all checks that have aged 12 months from the issue date and have remained outstanding.

c. Treasury checks canceled because of limited payability are refunded to the USDO. Treasury credits the amounts of the canceled checks to CGFS/OMA through the IPAC system. CGFS/OMA transmits the IPAC statement to the USDO for preparation of a journal voucher to return the funds to the original obligation. If a check has been negotiated to a financial institution within one year from the date of issuance, but processing in the FRB prevented the payment from being applied before the check was canceled, the credit provided by the Treasury will be reversed.

d. When no claim has been presented within three years from the date of the check, the agency should return the funds to Treasury through Form SF-2108, Year-End Closing Statement, Treasury General Account 20X3220. In the event that a claim is placed after the funds have been returned, funds will be restored through the restoration process. (See TFM Bulletin 90-03 for further details.)

4 FAH-2 H-427.5-2 Local Currency Check Limited Payability Cancellations (Non-current or Stale Dated)

(CT:DOH-18; 09-29-2005)

a. The laws of the host country determine limited payability for local currency checks. Limited payability varies by country. In most countries, checks are valid for one year; in others, for six months; and in some, there is no limited payability.

b. The USDO or designee should review the checks in transit each month to identify those outstanding more than six months. Those that are more than six months outstanding should be listed by bank. If the checks become invalid locally before six months, cancellation in the system should be initiated earlier. If they are legally invalid after 12 months, and there are a substantial number of checks cashed in that country between 6-12 months, the USDO can wait to cancel them in the system until 12 months. If the legal life is longer than 12 months, they should still be canceled in the system so excess funds are not kept in the local bank unnecessarily. A letter is then sent to the bank, through the post, requesting a stop payment (for countries where the check may be valid after they are canceled in the system). If post does not have the checks on hand, the checks should be canceled using Form FS-440, Statement of Depository Account and Report of Checks Drawn. This results in the reporting of more accurate cash accountability to Treasury on Form SF-1218.

c. The USDO prepares a journal voucher to credit the Treasury account 20X6045, Proceeds and Payment of Certain Unpaid Checks, (1 TFM 4-8050.40a) for the amount of non-current checks being canceled. These checks may be reissued later against this account if a request is made (see 4 FAH-2 H-427.5-3 for procedures). By crediting this account rather than the original appropriation, it ensures that the USDO does not credit a closed obligation and that posts accounting records are correct since the services were already received for the payment.

d. The USDO or designee must maintain a list of all checks credited to 20X6045. The following information should be included for each check:

(1) Date;

(2) Number of check;

(3) Name of payee;

(4) Amount of check, foreign currency; and

(5) Amount of checkU.S. dollar equivalent at time of issue.

4 FAH-2 H-427.5-3 Claims Against A Canceled Check

(CT:DOH-18; 09-29-2005)

a. If a payee has an expired check and wants to make a claim against it, they should return the expired check to the USDO that authorized the payment.

b. For U.S. Treasury checks, valid claims against checks canceled by Treasury may be resubmitted to the post that originated the payment, or the USDO, if the post is unknown. (See 4 FAH-2 H-622.2 for details.)

c. For local currency checks, valid claims against checks canceled by the USDO as non-current should be submitted to the USDO. The USDO reviews the list of checks canceled to 20X6045 to determine if the check in question was canceled to this account. If it was, the USDO authorizes, in writing, the post to reissue the check against the 20X6045 account. The USDO must annotate on the original list of checks canceled to 20X6045 that this check was reissued against the account.

4 FAH-2 H-428 AND H-429 UNASSIGNED

UNCLASSIFIED (U)