About the Financial Management Service

All About FMS

Our Background and History

In 1940, the United States Department of the Treasury established the Fiscal Service, which consisted of the Bureau of Accounts, the Bureau of the Public Debt, and the Office of the Treasurer. A 1974 reorganization of the Fiscal Service created the Bureau of Government Financial Operations, which was formed from a merger of the Bureau of Accounts and most functions of the Office of the Treasurer. In 1984, the Bureau of Government Financial Operations was renamed the Financial Management Service (FMS); the new name reflected Treasury's renewed emphasis on achieving greater efficiency and economy in government financial management.

For more detailed information on FMS' background and history, click here.

Our Mission

The mission of FMS is to provide central payment services to federal program agencies, operate the federal government's collections and deposit systems, provide governmentwide accounting and reporting services, and manage the collection of delinquent debt. No longer just the government's "bookkeeper," the FMS of the new millennium is an organization that is on the technology forefront in its use of automated systems. The bureau also supports federal agencies' financial management improvement efforts in the areas of education, consulting, and accounting operations through a franchise fund business. FMS' express and explicit mission strategically supports the overarching Treasury goal of managing the government's finances effectively, as well as two of the governmentwide initiatives under the President's Management Agenda - Improved Financial Performance and Expanded Electronic Government.

Our Services

Disbursing Federal Payments: FMS is the primary disburser of payments to individuals and businesses on behalf of federal agencies (e.g., benefit payments paid by the Social Security Administration or the Department of Veterans Affairs; federal income tax refund payments; payments to businesses for goods and services provided to the federal government). The majority of the payments are disbursed through electronic funds transfers; the remaining are check payments. Annually, FMS disburses nearly a billion payments, with an associated dollar value of more than $1.6 trillion. In keeping with the FMS strategic goal of moving toward an all-electronic Treasury, FMS continually invests in state-of-the-art technology systems that are integral to processing payments accurately, efficiently, and securely.

Collecting Federal Revenue: FMS administers the world's largest government funds collections systems through a network of more than 10,000 financial institutions. Each year, the bureau collects more than $2.45 trillion in federal revenues, such as individual and corporate income tax deposits, customs duties, fees for government services, fines, and loan repayments. Using cutting-edge technology, FMS has taken a leadership role in providing federal agencies, individuals, businesses, tax practitioners, and financial institutions with a wide variety of electronic collection alternatives. The options are designed and developed with some major goals in mind: to offer a service that is easy to use, convenient and secure; to streamline the collection process; to make full use of web technologies; to manage the depositary services provided to Treasury by financial institutions, and to monitor the cash position of the federal government.

Issuing Governmentwide Financial Reports: FMS has the critical responsibility of maintaining the federal government's set of accounts and serving as the repository of information About the Financial position of the United States government. The bureau closely monitors the government's monetary assets and liabilities at all times through its oversight of central accounting and reporting systems. FMS' oversight responsibilities include assisting federal agencies with adopting uniform accounting and reporting standards and systems and assuring the continuous exchange of financial information among federal agencies, the Executive Branch's Office of Management and Budget, and financial institutions. The bureau also gathers and publishes governmentwide financial information for use in establishing fiscal and debt management policies. The public and private sectors are able to monitor the government's financial status using this financial data. FMS publications include the Combined Statement of Receipts, Outlays, and Balances of the United States Government (the official publication of receipts and outlays), the Monthly Treasury Statement (a report of the government receipts and outlays and the budget surplus or deficit that is based on agency reporting), the Daily Treasury Statement (a report summarizing data on the cash and debt operations of the Treasury, which is based on reporting of the Treasury account balances of the Federal Reserve Banks), and the Financial Report of the United States Government (the consolidated audited financial statements for the preceding fiscal year that cover the Executive Branch, as well as parts of the Legislative and Judicial Branches.

Collecting Delinquent Debt: FMS, using a centralized process, collects delinquent debts (e.g. federal student, mortgage, or small business loans, federal salary or benefit overpayments, fines or penalties assessed by federal agencies) owed to the United States government, as well as income tax debts owed to states and overdue child support payments owed to custodial parents. Two major tools are used to collect delinquent debts; first, under the Treasury Offset Program, the names and taxpayer identifying numbers of debtors included in an FMS database are matched against the names and taxpayer identifying numbers of recipients of federal payments. If there are matches, the amounts of the payments are reduced ("offset") to satisfy the delinquent debts; second, through a program known as "cross-servicing", delinquent debts that are referred to FMS by federal agencies are collected using a variety of means. They include offsetting federal payments, sending demand letters to debtors, entering into repayment arrangements, withholding wages administratively, referring debts to the Department of Justice for action, reporting to credit bureaus, and contracting for the services of private collection agencies. By allowing federal agencies with lending authority to access information from the FMS delinquent debtor database, FMS works to ensure that federal government loans are not made to previously identified delinquent debtors. Since Congress placed debt collection under a single, central authority, FMS collects more than $3.7 billion each year in delinquent debt.

Supporting Federal Agencies' Financial Improvement Efforts: FMS, by taking an entrepreneurial approach, supports the financial improvement efforts of federal agencies. Over the last five years, through course offerings, conferences, and workshops, FMS has trained thousands of federal agency representatives in a myriad of financial management areas (e.g., financial reporting assistance, review and closeout activities). In addition, FMS offers professional consulting services to federal agencies seeking assistance with activities such as reconciliations of funds balances with Treasury, Standard General Ledger compliance reviews, internal controls reviews, financial reporting compliance reviews, cost accounting assistance, and financial systems services.

Our Partnerships

Federal Agencies: Because of the very unique governmentwide mission of FMS, the bureau interacts and forges partnerships with virtually every Executive Branch agency. Through FMS' state-of-the-art information technology systems, for example, agencies are able to submit certified requests for payment disbursements, determine the status of disbursements, initiate claims, verify deposits and funds transfers, and report and view financial information for accounting purposes. On a regular basis, FMS also conducts workshops and conferences for agency representatives to assist them with all aspects of government financial management, including cash management, governmentwide accounting and reporting and debt management.

Financial Institutions: Financial institutions are key partners of Treasury and FMS. They provide various critical services in their capacity as depositaries and financial agents of the United States as designated by the Secretary of the Treasury. Accepting and processing public monies and services related to the disbursement of and accounting for those monies are prominent among the responsibilities relegated to financial institutions.

Federal Reserve Banks: Under federal statute, Federal Reserve Banks act as fiscal agents and depositories as directed by the Secretary of the Treasury. For example, the banks maintain the Treasury's account, accept deposits of federal taxes and other federal agency receipts, and process checks and electronic payments drawn on Treasury's account.

• What We Do
  
  
• Background and History of the Financial Management Service