About the Financial Management Service
What We Do at FMS
General Information
The Financial Management Service (FMS) disburses more than $1.6 trillion in federal payments annually, including Social Security, veterans' benefits and income tax refunds, to more than 100 million people. FMS also collects more than $3.11 trillion each year in federal revenues, oversees a daily cash flow of more than $608 billion, provides centralized debt collection services to most federal agencies and provides governmentwide accounting and reporting.
FMS has about 2,100 employees, one-third of whom are located in four Regional Financial Centers (RFCs)—Austin, TX; Kansas City, MO; Philadelphia, PA; and San Francisco, CA; and one Debt Collection Center in Alabama. The RFCs issue payments by electronic funds transfer (EFT) and paper check, and the Debt Collection Center collects debts older than 180 days on behalf of federal agencies. All FMS employees, including the Commissioner, are career civil servants.
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Payments
In fiscal year 2007, FMS issued more than 982 million non-Defense payments with a dollar value of nearly $1.6 trillion, to more than 100 million people. For fiscal year 2007, more than 78 percent of these payments were issued by Electronic Funds Transfer (EFT). Nearly 215 million of FMS' payments were disbursed by check.
In 1996, Congress passed a law requiring most federal payments to be paid by EFT. For those individuals without a bank account, Treasury designed the Electronic Transfer Account (ETA), a low-cost account to be offered by federally insured financial institutions with the same consumer protections available to other account holders. The ETA is available to any Federal benefit, wage, salary, or retirement payment regardless of the recipients' previous credit history.
FMS' Regional Financial Centers perform other payment-related services, including preliminary handling of check claims, complete handling of EFT claims, processing of all trace and reclamation actions for EFT payments, cancellation of returned checks, and making any related adjustment in agencies' accounts.
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Collections
FMS administers the world's largest collections system, gathering more than $3.11 trillion annually through a network of more than 10,000 financial institutions. FMS collects more than $2.45 trillion of that total—nearly 79 percent—through electronic transactions. It also manages the collection of federal revenues such as individual and corporate income tax deposits, customs duties, loan repayments, fines and proceeds from leases.
The Electronic Federal Tax Payment System (EFTPS) was originally introduced in 1996, but in September 2001, FMS and IRS launched a new Internet application, EFTPS-Online at www.eftps.gov, which offers all businesses and individuals the convenience of making their federal tax payments electronically 24 hours a day, 7 days a week, instead of using checks. In fiscal year 2007, EFTPS collected nearly $2.09 trillion, with more than $349 billion collected over the Web through EFTPS-Online.
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Governmentwide Accounting
FMS gathers and publishes governmentwide financial information that is used in establishing fiscal and debt management policies and also used by the public and private sectors to monitor the Government's financial status. These publications include:
The Financial Report is the federal government's set of audited financial statements, a requirement of the Government Management and Reform Act of 1994.
The Intragovernmental Payment and Collection System (IPAC), which interfaces with the FMS Central Accounting System to provide accounting information used to report the government's financial status, enables funds to be transferred between federal program agencies and provides the capability for agencies to include descriptive information related to each transaction, assisting FPAs with their monthly reconciliation. IPAC is currently used by approximately 900 government agencies.
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Debt Collection
FMS serves as the government's central debt collection agency, managing the government's delinquent debt portfolio. Since enactment of the Debt Collection Improvement Act of 1996 (DCIA), FMS has collected $31.5 billion in delinquent debt. Since FMS was given responsibility for centralized collection of debt, we have sharply increased collections through program changes, adding numerous payment streams and categories of debt. We have also worked with agencies to ensure timely referral of debts more than 180 days past due. In fiscal year 2007 FMS collected more than $3.7 billion in delinquent debt owed to the federal government.
Electronic Commerce
Through its Electronic Money (E-Money) Program, FMS tests new payment and collection technologies using the Internet and card technology, as well as related technologies such as digital signatures and biometrics. FMS has several programs to help federal agencies modernize their payment and collection activities, including:
- governmentwide collections portal
- stored value cards used on military bases and in government hospitals;
- point-of-sale check truncation; and
- Internet credit card collection program.
Since October 2000, FMS has collected monies through a federal Internet portal called Pay.gov. Pay.gov provides collections, form submittal and bill presentment, authentication, and agency financial reporting services. Pay.gov, which has been implemented with 85 Federal agencies representing 208 cashflows, collected $37.94 billion in fiscal year 2007.
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