Vol 1 - Part 5 - Chapter 5000 T/L 552 UNCOLLECTED AND LOST CHECKS This chapter provides instructions for agencies to follow to recover funds that result from unpaid checks. Section 5010 - Introduction Checks not paid for any reason by the bank on which they're drawn, except as specified by the Department of the Treasury (Treasury), will be processed for fund recovery according to the debit voucher procedures in this chapter. Section 5015 - Authority Section 3(b) of the Government Losses in Shipment Act, as amended (40 U.S.C. 725), provides that the Secretary of the Treasury is authorized to execute and deliver agreements of indemnity to enable the United States to obtain replacement of any instrument or document received by the United States which, after having been so received, became lost, destroyed, or so mutilated as to impair its value. Section 5020 - Depositary and Agency Procedures for Unpaid Checks 5020.10 - Depositaries When a check is returned unpaid to the depositary with which the check was originally deposited, the depositary will immediately (1) prepare and execute an SF 5515 (Appendix No. 1 to I TFM 5-3000) and (2) charge the amount of the unpaid item in the U.S. Treasury's General Account. Check endorsements should contain the agency location code (ALC) and depositor's address (I TFM 5-2040.40) to allow depositaries to prepare SF 5515s without referencing the related SF 215: Deposit Ticket. If such information is not readable, the depositary will have to refer to the related SF 215. 5020.20 - Depositors Upon receipt of an unpaid check and copies of the SF 5515 from the depositary, depositors will adjust their accounts and proceed at once to collect the amount as though no check had been received. If a check is lost (whether before or after deposit), depositors must adjust their accounts and immediately request the drawer to stop payment on the check. Depositors will process for deposit, as new business, new checks received as a result of the above actions. 5020.30 - Adjustments of SF 5515 If a depositary prepares an SF 5515 and charges the amount of an unpaid check to Treasury's General Account under the wrong ALC, the depositor whose ALC has been charged in error will, upon receipt of the unpaid check and copies of the SF 5515 from the depositary, prepare an SF 215 (I TFM 5-3000) to offset the debit. The usual copies of the SF 215 and the unpaid check will be forwarded to the depositary, along with an explanation of the action. 5020.40 - Special Arrangement Between Depositary and Depositor Depositaries may defer charging the Treasury's General Account under an arrangement with the depositor, by which uncollectible checks are automatically reprocessed for collection or returned to the depositor to be presented again, or replaced by new checks. Under such an arrangement, SF 5515s would not be prepared to charge the account unless the checks are not collected or replaced within an agreed period of time. Section 5030 - Replacement of Lost, Destroyed, and Mutilated Checks Immediately upon discovering loss, destruction, or mutilation of checks, agencies should notify the drawer to request a stop payment be placed on the original and a replacement check be reissued. The agency must attempt to obtain a replacement without an agreement of indemnity. When it is not possible to obtain a replacement without an agreement of indemnity, the case should be transmitted to the Bureau of the Public Debt (see Contacts section) for execution of the agreement of indemnity. The following information must be included in the request. 1. A complete description of the check and a photocopy, if possible. The description should include at a minimum, the type of check, date issued, amount, payee, and purchaser (for cashier's checks or money orders). 2. A statement from the bank issuing the check stating that the check has not been presented for payment. This statement should clearly show the name and address of the bank to which the agreement of indemnity should be sent, and the name and address of the bank upon which the original check was drawn, if different. 3. A complete address of the office to which the replacement check is to be delivered. 4. A recommendation by the agency that an agreement of indemnity be issued. Upon approval of the agency's recommendation, the Bureau of the Public Debt will execute and deliver the agreement of indemnity, as appropriate. To expedite the replacement of the check, all agreements of indemnity will be transmitted directly by the Bureau of the Public Debt to the bank issuing the replacement check. A copy of the agreement, together with a copy of the transmittal letter will be sent to the office requesting the agreement of indemnity and to the office to which the replacement check is to be delivered. CONTACTS General inquiries regarding this chapter should be directed to-- Banking Operations Branch Banking Management Division Financial Management Service Department of the Treasury 3700 East West Highway, Room 501A Hyattsville, MD 20782 (Telephone 202-874-6900) Inquiries regarding Agreements of Indemnity In Connection With The Replacement of Checks should be directed to Department of the Treasury Bureau of the Public Debt Division of Financial Management P.O. Box 1328 Parkersburg, WV 26106-1328 (Telephone 304-480-8200)