Payment Management Leads Change to Implement Treasury's All Electronic Initiative
By Sheryl Morrow, Assistant Commissioner, Payment Management & Chief Disbursing Officer
I have been serving as the Assistant Commissioner of Payment Management for about 18 months. During this time, I have been impressed time and time again that the Payment Management organization continues to demonstrate a great tradition of providing outstanding customer service to customer agencies and the American people. Our operating values, including production efficiency and customer service, guide the outstanding work we do every day, which includes making payments on time – every time.
As enduring as the payment function is — a foundation of the Financial Management Service (FMS) — Payment Management employees understand the federal payment landscape is expected to change as we move into an All-Electronic environment. On December 21, 2010, FMS issued the regulations (31 CFR 208 and 31 CFR 210) which implement the All-Electronic Treasury Initiative. This was the final rule to extend the safety and convenience of electronic payments to all Americans receiving federal benefit and non-tax payments. So, anyone applying for benefits after May 1, 2011, will receive their payments electronically, while those already receiving paper checks will need to switch to an electronic payment by March 1, 2013. This is a monumental change to the payment business.
More than 80 percent of federal benefit recipients already use direct deposit, and now millions of additional retirees, veterans and other Americans will also receive their money in the safest, most reliable way — electronically. Moreover, this important effort will provide significant savings to American taxpayers who will no longer incur the annual $120 million price tag associated with paper checks. It will mean that all federal benefits including Social Security, Supplemental Security Income, Veterans Affairs, Railroad Retirement Board, Office of Personnel Management benefits and other non-tax payments will be made electronically.
The payment trend we see internally is that our check production has significantly decreased over the past 10 years. In 2000, we produced 266 million checks, while in 2010 we only produced 189 million checks. In 2013, we expect to process less than 100 million. In addition, technology has played a significant role to our business over the past few decades, and it will continue to have major impacts well into the future. Our new consolidated Payment Automation Manager (PAM) — which you will read about in this special issue — will dramatically reduce the resources we need to process payments. About 85 percent of the manual payment processes in use today will be automated with full implementation of PAM. This effort will modernize more than 30+ legacy payment applications that FMS uses to disburse approximately one billion payments annually. Complete implementation of PAM will occur in about three years.
Other news within PM shows change is a constant. Over the past year, we have been repurposing our Austin Regional Financial Center (RFC) into a Debt Operations Center and transferring its payment and post payment processes to the remaining three RFCs in Kansas City, Philadelphia and San Francisco. This has been a huge undertaking, and we appreciate the support from our customers over the past year in assisting us with this transition. This effort will be completed by the end of Fiscal Year 2011.
These are just a few of the big changes currently impacting Payment Management. In this edition of the Financial Connection, in addition to reading more about the All-Electronic Treasury and PAM, you can also read updates about our Direct Express® Debit Card and Go Direct® campaign, our collaboration with federal program agencies on increasing medical payments electronically, how the purchase of savings bonds using tax refunds is being expanded and more.