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APG
Agency Priority Goal

Fiscal Service’s Payments Strategy and Innovation Division Works to Reduce Paper Checks

Creating a modern, seamless, and cost-effective federal payment experience for the public is not only a Treasury priority, but also a Fiscal Service agency priority goal (APG). We are meeting that goal by reducing the number of Treasury-disbursed paper checks and increasing electronic payments. The Fiscal Service Payment Management team is responsible for this initiative. The PSI team works with the top check-producing agencies to develop check-reducing strategies and promote the benefits for increasing electronic payments in a data-driven way.

APG 1.0

The APG initially spanned fiscal year (FY) 2020-2021. In FY 2020, the team’s strategic approach was to work individually with the top check producing federal agencies to help them recognize their role in a paperless government and develop approaches to getting there. This phase of the APG (known as APG 1.0) centered around the awareness of Treasury’s continuous goal to reduce paper checks.

In a Bureau-wide effort, the PSI team reached out to the National Payment Recovery Center leadership team and the Customer Service Division in the National Payment Center of Excellence (NPCE). Data analytics staff in the Customer Service Division played a vital role in providing check payment detail data for the agencies: type, volume, dollar, and recipient.

There is no denying the advantageous leg-up that the APG 1.0 approach provided in increasing electronic payments. The PSI team used and continues to use this data to determine which agencies need assistance to reduce their check payments and improve ACH (automated clearing house) participation. This data continues to serve as the basis for setting up meetings to discuss and determine strategic actions.

Fiscal Service Reaches FY 2021 Goal to Increase Electronic Payments

The PSI team and NPCE staff worked hard to meet the goal in helping agencies to increase electronic payments and reducing the number of Treasury-disbursed paper checks to 49 million in FY 2021.

As of October 2021, the final check total was 48,944,924. This was 255,076 below the APG target!

APG 2.0

For FY 2022, the team has entered APG 2.0, and the PSI team are gearing up to reach a 99 %

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FY 2019 FY 2020 FY 2021
Target Measure Actual Goal Actual Goal Actual
Check volume (all) 54 M 51 M 50.5 M 49 M 48.9
EFT % (all) 95.6% 95.8% 96.0% 96.1% 96.2%
EFT % (tax) 76.8% 78.0% 80.7% 79.0% 80.3.%

electronic payments goal by 2030. This second phase centers around the implementation and execution of the bureau’s Financial Management Vision. In addition to increasing electronic payments government-wide, Fiscal is taking on the social responsibility of creating a modern, seamless, and cost-effective federal payment experience for the public that expands financial inclusion and improves climate sustainability (less paper processing).

In APG 2.0, the PSI team will set their sights on:

  1. Reducing the number of checks printed by Fiscal Service from 49 million in FY 2021 to 45.7 million in FY 2022 and 44.1 million in FY 2023
  2. Increasing the electronic payment rate for Treasury-disbursed payments to 96.56% by the end of FY 2023, compared with 96.18% in FY 2021
  3. Increasing the electronic payment rate for IRS individual tax refunds to 81.00% by the end of FY 2023, compared with 80.34% in FY 2021

To complement and supplement the beneficial data provided by the Customer Service Division in NPCE, the PSI team brought in the Payment Integrity Center of Excellence (PICOE) in Philadelphia. The PICOE team assist agencies in reducing improper payments and is tasked with solving government-wide payment integrity challenges.

For APG 2.0, the PSI team will promote the use of PICOE’s account verification service (AVS) tool. The AVS tool can confirm an account is valid before a payment is made. Imagine the power behind being able to say with confidence an electronic payment is made 100 % of the time to the right recipient’s bank account. A cross-bureau initiative, AVS is supplemented by the expert knowledge of PNC Bank, as it implements early warning services (a national database of financial information), and priority data source GIACT systems, an industry leader in payments and identity fraud prevention. With PICOE’s assistance with the AVS tool, the PSI team is well on their way to helping Fiscal Service reach its 99 % electronic payments goal by 2030.

DMS Initiates Pilot to Increase Electronic Payments

In December 2019, Debt Management Services (DMS) signed on with the Administrative Resource Center (ARC) to complete certain functions on its behalf. Processing payments is one of those functions. When a DMS debt cannot be identified, or the funds are sent to DMS in error, DMS processes checks to refund funds to individuals/businesses. On occasion, these checks are returned to Treasury. After some research, DMS may reissue those checks if updated information has been provided.

Beginning June 2021, the Program Accounting Branch in DMS implemented a pilot to explore the capability to refund payments via ACH rather than paper check, where financial institution data from the original payment is available.

DMS is conducting testing throughout the pilot to see whether payments refunded using ACH are returned and to gather necessary feedback from payment recipients. Stay up to date on pilot progress and follow us @FiscalService

Last modified 02/07/22