[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2002]
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

[[Page 43]]

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 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.