FAM 1996-22
FINANCIAL ADMINISTRATION MEMORANDUM NO. 96-022 (II.J.)
To: Bureau Assistant Directors, Administration
Director of Administrative Services
Bureau Finance Officers
Chief, Division of Fiscal Services
From: Chief, Division of Financial Administration
Office of Financial Management
Subject: Third-Party Draft Policy
In accordance Treasury Financial Manual (TFM), I TFM 6-8000 - Cash
Management, agencies are required to consider a range of alternative
payment options. These options typically include: Automated Clearing
House, Government Travel Card, Government Purchase Card, third-party
drafts, and the new FedSelect checks.
The Department's current third-party draft policy (FAM 90-055) prohibits
the use of third party drafts for travel advances and reimbursements
(unless the Office of Financial Management granted an exception), and
limits transaction amounts to $500. However, in order to support
streamlining initiatives these restrictions are hereby rescinded. It
should be emphasized that third-party drafts should only be used when it
is determined that they are more cost-effective than the other available
payment mechanisms cited above in accordance with the TFM.
The preferred mechanism for financing travel is to use the American
Express Travel Program with Automated Teller Machine (ATM) privileges
for obtaining the appropriate advance. Bureaus that are not using ATM
privileges may issue a third party draft for travel advances. The
amount of the travel advances shall not exceed the customary
out-of-pocket expenses that the employee expects to incur (i.e., the
meals and incidental expense allowance plus tolls, parking, taxi, and
other miscellaneous expenses not customarily charged). A third-party
draft may not be used to finance travel related costs for individuals
(i.e., lodging, car rental, etc.) whose Government sponsored travel
charge card has been revoked, or employees who chose to not obtain a
travel card.
The amount of a third-party draft for travel reimbursements will not
exceed $2,500 per trip. The new limit should not be sufficient to cover
almost all travel reimbursements. Moreover, the $2,500 limit places
travel voucher payment limits in line with micro-purchase limits. Any
request for an exception to the $2,500 limit should be fully documented
and sent to the Office of Financial Management for approval.
If you have any questions on this subject, please contact Michael
Anthony on (202) 208-6824.
William E. Webber
Prior Financial Administration
Memorandum on this Subject:
No. 90-055 (II.J.), June 26, 1990 - Canceled
