[Code of Federal Regulations]

[Title 31, Volume 2]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 31CFR206.4]



[Page 42-43]

 

                  TITLE 31--MONEY AND FINANCE: TREASURY

 

         CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY

 

PART 206_MANAGEMENT OF FEDERAL AGENCY RECEIPTS, DISBURSEMENTS, AND OPERATION OF THE CASH MANAGEMENT IMPROVEMENTS FUND--Table of Contents

 

Sec.  206.4  Collection and payment mechanisms.



    (a) All funds are to be collected and disbursed by EFT when cost-

effective, practicable, and consistent with current statutory authority.

    (b) Collections and payments will be made by EFT when cost- 

effective, practicable, and consistent with current statutory authority. 

When consistent with these criteria, specific cash flows will utilize 

EFT as follows:

    (1) Fees/fines. EFT will be adopted as the presumed method of 

collecting fees and fines, especially when these collection cash flows 

are recurring or of large dollar amounts.

    (2) Tax collections. EFT will be adopted as the primary method for 

collecting taxes. EFT mechanisms may include ACH credit or debit cards.

    (3) Salary payment. Presumed EFT will be adopted as the method for 

paying employees, and entrance enrollment forms for establishing regular 

payments will be designed to use this approach.

    (4) Vendor and miscellaneous payments. Each department and agency 

will exercise its authority under the Federal Acquisition Regulation to 

require that all contractors are paid by EFT, unless a determination is 

made that it is not in the best interest of the Federal Government to do 

so. EFT will be adopted as the standard method of payment for all 

Federal program payments originated by agencies or their agents.

    (5) Benefit payments. EFT will be presented to new beneficiaries as 

the presumed method for receiving benefits. EFT payment methods, such as 

Electronic Benefit Transfer, will be adopted and implemented to make EFT 

accessible to all benefit recipients.

    (c)(1) Selection of the best collection and payment mechanism is a 

joint responsibility of an agency and the Service. An agency has 

responsibility for conducting cash management reviews; gathering volume 

and dollar data relative to the operation of the systems; and funding 

any implementation and operational costs above those normally funded by 

Treasury. The Service is the required approval authority when an agency 

desires to convert from one collection mechanism to another. The 

Service's written approval is required prior to an agency entering into 

new contractual agreements or renewing existing contracts for agency 

collections or payments systems. Agencies will follow guidelines for the 

cost-effective usage of collection and payment mechanisms, published in 

the TFM, Volume I, Part 6-8000, in their selection and recommendation to 

the Service of an appropriate funds transfer mechanism. The agency will 

provide the Service with a recommended mechanism for any new or modified 

cash flows. The Service will review the recommendations, approve a 

mechanism, and assist with implementation.

    (2) If an agency proposes a collection or payment mechanism other 

than EFT, it may be required to provide a cost-benefit analysis to 

justify its use. Cost/benefit analyses must include, at a minimum, known 

or estimated agency personnel costs, costs of procurement, recurring 

operational costs, equipment and system implementation and maintenance 

costs, costs to payment recipients, and costs to remitters. Agencies 

should consult with Treasury to determine the need to include interest 

costs associated with



[[Page 43]]



float in their computations of benefits and costs.

    (d) An agency will require the collection of funds by the agency to 

be made via EFT and the disbursement of funds by the agency to be made 

via EFT as a provision of new contractual agreements or renewal of 

existing contracts that impact agency collection or payment mechanisms, 

when cost-effective, practicable, and consistent with current statutory 

authority.