FMM_2_12_11_HAZMATFees_070109.pdf

TSA Financial Management Manual July 1, 2009

Part 2 – Chapter 12, Section 11 1

HAZMAT FEES

1. PURPOSE

The purpose of this section is to provide instructions on the proper accounting and reporting of fees collected in support of the Hazardous Materials (HAZMAT) Threat Assessment Program.

Under the USA PATRIOT Act, TSA is required to conduct background investigations on all commercial truck drivers applying for, renewing or transferring a Hazardous Materials Endorsement (HME). A state may not issue or renew an HME on a Commercial Driver’s License (CDL) until TSA has performed a Security Threat Assessment (STA) to ensure that the applicant does not pose a security risk resulting in a denial of the license. This assessment includes a fingerprint-based Federal Bureau of Investigation (FBI) criminal history records check, an intelligence-related check, as well as an immigration check. This program does not apply to individuals who currently hold a CDL and do not wish to qualify for a HME.

TSA has a contractor to collect applicant fingerprints and information for states that elect to use a TSA agent for this purpose. All states are required to provide a declaration to TSA on their decision to use TSA’s contractor or to itself collect and submit HME applicant fingerprints and information. States that elect to use the TSA agent are referred to as ‘Participating States.’ States not participating are referred to as ‘Non-Participating States.’

Thirteen states have elected not to use TSA’s contractor and will complete these tasks using available resources. In either case, the drivers’ fingerprints and biographical information are forwarded to TSA for vetting.

The total fee collected for each HME applicant in a Participating State is $92.75 which breaks down as: $38.00 for the Information Collection and Transmission fee; $37.50 for the STA fee; and $17.25 for the FBI fee. Applicants from Non-Participating States will pay a $34.00 STA fee and $17.25 FBI fee, in addition to any additional fee charged by the Non-Participating State.

2. POLICY REFERENCES

• USA PATRIOT Act, Public Law Number 107-56, Volume X, Statute 1012 – prohibits states from issuing a HAZMAT endorsement on a CDL without determining whether or not an individual seeking to transport hazardous materials poses a security risk.

• Security Threat Assessment for Individuals Applying for a Hazardous Materials Endorsement for a Commercial Drivers License, 49 Code of Federal Regulations Part

1572.15 – establishes STA standards for determining whether an individual poses a security threat resulting in a denial of a HME for a CDL.

• HAZMAT Fee Rule, 49 Code of Federal Regulations Part 1572.400-405: Fees for Security Threat Assessments for Hazmat Drivers – establishes a fee for STAs that TSA is required to perform on individuals who apply for or renew a HME for a CDL.

This includes a fee for the collection and transmittance of fingerprints and biographical information.

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• Debt Collection Improvement Act of 1996, Public Law Number 104-134, Volume 110 Statute 1321–358 – requires delinquent debts over 180 days old to be transferred to Treasury and outlines offset actions, garnishments, and dissemination of information regarding the identity of delinquent debtors.

• Chief Financial Officers Act of 1990 (CFO Act), Public Law Number 101-576, Volume 104 Statute 2838 – requires agency CFOs to review, on a biennial basis, fees and other charges imposed for services and things of value the agency provides, and make recommendations on revising the charges to reflect costs incurred by the agency in providing those services and things of value.

• 31 Code of Financial Regulations (CFR) Part 901 – outlines the actions an agency must follow regarding debt collection actions, debt reporting, penalties, administrative fees, and installment repayments.

• 31 CFR Part 210 – governs all entries and entry data originated or received by an agency through the Automated Clearing House (ACH) network.

• 49 CFR Part 89 – implements the Federal Claims Collection Act of 1996 which permits TSA to seek civil penalties for collection amounts not remitted by the due date.

• OMB Circular A-25, Transmittal Memorandum #1, User Charges (July 8, 1993) – establishes Federal policy regarding fees assessed for Government services.

3. DEFINITIONS

• Accountable Official

– A U.S. government employee or agent who is responsible for or has custody of government/public funds. The term includes certifying officers, disbursing officials and others who are responsible for or have custody of government funds (e.g., cashiers, collecting agents, imprest fund cashiers, etc.). An accountable official can be held financially liable for illegal or improper payments.

Accounts Receivable o

– An umbrella term for amounts owed to the U.S. Government by an individual, government agency, organization, or other entity. A receivable should be recognized when a federal entity establishes a claim to cash or other assets against other entities, either based on legal provisions, and/or goods or services provided. If the exact amount is unknown, a reasonable estimate should be made.

[SFFAS 1, ¶41 as amended by SFFAS 7, ¶53.]

Receivables with the Public o

– These are claims by TSA against public and private entities, domestic or foreign individuals, and all organizations outside the U.S. Government.

Intragovernmental Receivables

– These are claims by TSA against another federal entity. Intragovernmental receivables are never considered delinquent because the U.S. Government does not assess interest, penalties, or administrative fees against itself.

Automated Clearing House (ACH) – A nationwide electronic funds transfer system governed by the National Automated Clearing House Association (NACHA) operating rules which provide for the interbank clearing of electronic payments for participating

Part 2 – Chapter 12, Section 11 3 depository financial institutions. The ACH system connects banks to one another by way of the Federal Reserve Banking System or other ACH operators.

• CA$HLINK

– An electronic system used to manage the collection of U.S.

Government funds and to provide deposit information to Federal agencies.

CA$HLINK links Federal agencies, Financial Institutions, the Federal Reserve Banks, and Treasury fund managers through a secure electronic network.

Clearing Accounts o Budget clearing account __F3875 is used to temporarily credit unclassified transactions from the public until the funds can be reclassified to the correct account.

– These are accounts established by Treasury to temporarily hold unidentified general, special, or trust fund collections that belong to the Federal Government until the funds are classified to the proper receipt or expenditure account.

An “F” preceding the last four digits of the fund account symbol identifies the clearing account. As of April 1, 2009, clearing account balances greater than 60 days will be reversed in the TSA accounting system per Treasury regulations.

o Undistributed intergovernmental payment account _F3885 is used to temporarily credit unclassified transactions between Federal agencies, including IPAC transactions.

• Core Accounting System (CAS)

– The TSA general ledger accounting system.

Delinquent Receivables

– These are accounts receivable not repaid by the date specified in the original dunning letter or repayment agreement.

Electronic Check Processing (ECP)

– A Treasury system used to clear checks using both ACH electronic debits and check truncation (aka Check 21). ECP makes a decision on each check whether to truncate and image the check or create an ACH debit. Most consumer checks will be converted to ACH debits, while most corporate checks and money orders will be truncated. Truncation under Check 21 does not convert a check into an ACH debit as conversion does; truncation simply accelerates the settlement process through the use of digital images.

FINCEN

– U.S. Coast Guard Finance Center; the TSA accounting service provider.

FEDWIRE

– A wire transfer collection system where remitters instruct their bank to transfer payment via the Federal Reserve Communications System to the Treasury General Account located at the Federal Reserve Bank in New York.

Intra-Governmental Payment and Collection System (IPAC)

– A Treasury application that facilitates the intra-governmental transfer of funds, with descriptive data from one Federal agency to another.

Lockbox – A collection and central processing service offered by financial institutions to accelerate the flow of funds to a Treasury General Account. This service includes the collection of the mail from a specified post office box; it includes sorting, totaling, and recording the payments and the deposits. All documentation for the lockbox is visible through the Electronic Check Processing online application.

Part 2 – Chapter 12, Section 11 4

• Non-Delinquent Receivables

– These are accounts receivable outstanding for 30 days or less.

Pay.gov

– A portal developed by Treasury. Pay.gov enables individuals and businesses to securely and easily send electronic payments to the Federal Government by debit/credit card or ACH debit of a savings or checking account through the Federal Reserve Bank of Cleveland.

Revenue o

– Inflows of resources arising from either exchange transactions (earned revenue) or nonexchange transactions (unearned revenue).

Earned Revenue o

– Inflows of resources to a governmental entity which it has earned. They arise from exchange transactions, which occur when each party to the transaction sacrifices value and receives value in return (i.e., when goods or services are exchanged).

Nonexchange Revenue

– Inflows of resources to the U.S. Government that it demands (e.g., taxes, duties, fines, and penalties) or that it receives by donations.

Treasury

4. RESPONSIBILITIES

– A general reference to the U.S. Department of the Treasury and the various programs and/or systems employed by Treasury.

The accurate accounting of HAZMAT fees involves the coordinated efforts of the TSA Office of Revenue, the Office of Financial Management (OFM), Office of Budget and Performance (OBP), and FINCEN. Since each entity acts as an accountable official, it is important that each accomplish its financial stewardship responsibilities.

A. The Office of Revenue is responsible for verifying receipt of funds from the TSA agent and non-participating states through the daily review of CA$HLINK and ECP. As the payment is received, the Office of Revenue documents the payment against the open receivable via a daily deposit report to FINCEN. At the end of each month, the Office of Revenue will send a consolidated report to the Program Office for compliance review.

B. The OFM Accounting Branch has oversight responsibility of ensuring the timely and accurate posting of all remitted STA fees and reconciling the general ledger to its subsidiary ledgers for fees collected. The OFM Accounting Branch is responsible for coordinating with the Office of Revenue and FINCEN to ensure that unidentified remittance amounts are accurately posted.

C. The OBP is responsible for preparing quarterly apportionment requests and allocating budget authority from fees collected to TSA program offices.

D. The OFM Financial Statements and Reporting Branch (FSRB) is responsible for preparing the quarterly accounts receivable accrual for the HAZMAT fees to be included in the quarterly financial statements. This is necessary only if uncollected fees earned are considered material.

E. The OFM Financial Systems Branch is responsible for managing CAS.

Part 2 – Chapter 12, Section 11 5

F. The OFM Funds Control and Program Support Branch ensures accurate posting of OBP issued allotments.

G. FINCEN is responsible for posting receipts of STA fees into CAS. FINCEN coordinates unresolved issues with the Office of Revenue and the OFM Accounting Branch.

H. The Transportation Threat Assessment and Credentialing Office (TTAC) is the TSA program office responsible for managing the HAZMAT program. The HAZMAT Program Office, part of TTAC, is responsible for ensuring HAZMAT CDL candidates remit the STA fees before candidates are approved for an HME and maintains compliance responsibility for all delinquency accounts.

5. PROCEDURES

Within TSA, the key processes for managing the HAZMAT fees are as follows:

A. Budget formulation and appropriation of funds.

B. Establishing accounts receivable.

C. Collecting and posting the HAZMAT fees.

D. Budget execution: apportionment, allotment, sub-allotment, and allocation of funds.

A. Budget Formulation and Appropriation of Funds:

(1) Establishing the HAZMAT Fee: The HAZMAT fee includes a Threat Assessment fee ($37.50 for Participating States and $34.00 for Non-Participating States), an FBI fee ($17.25), and an Information Collection and Transmission fee for Participating States ($38.00). Threat assessments are conducted every time an individual applies for or renews a HME; commercial drivers are currently required to renew their HME every five years.

(a) Threat Assessment Fee: covers TSA costs associated with checking biometric information against multiple databases and other sources so that TSA can determine whether applicants pose a security threat.

(b) FBI Fee: used by the FBI to perform its Criminal History Records Check, which checks fingerprints and biographical information against multi-state criminal history databases to assist TSA in determining whether applicants pose a security threat. As of February 2009, TSA’s agent representative remits FBI fees submitted by Participating States directly to the Department of Justice/FBI.

(c) Information Collection and Transmission Fee: covers the cost associated with fingerprinting and transmitting biographical information. Non- Participating States assess their own fees to cover these costs

Pursuant to the Chief Financial Officers Act of 1990 and Office of Management and Budget (OMB) Circular A–25, DHS/TSA will review this fee at least every two years. Upon review, if it is found that the fee is too high or too low, the amount of the fee will be adjusted accordingly.

Part 2 – Chapter 12, Section 11 6

(2) Forecasting the Annual Fee Revenue:

(a) The Office of Revenue is responsible for forecasting the annual revenue from

HAZMAT fees.

(b) The forecasted amount of collections is provided to the OBP for inclusion in the annual TSA budget request.

(3) Recording Direct Appropriations: The HAZMAT Threat Assessment Program does not receive direct appropriations.

(4) Recording Anticipated Collections:

(a) The OFM Funds Control and Program Support Branch records the anticipated non-federal collections and apportionment of HAZMAT fees based on the SF 132 – Apportionment and Reapportionment Schedule and supporting schedules provided by the OBP. This occurs for every SF 132 approved by OMB during the fiscal year.

(b) OBP notifies the OFM Funds Control and Program Support Branch of the amount to record as anticipated collections, and verifies the amounts posted to CAS are correct.

Budgetary Entry To record anticipated collection of HAZMAT fees

Account Description Debit Credit

4060 Anticipated Collections From Non- Federal Sources XX

4450 Unapportioned Authority XX

Proprietary Entry None1

(5) Recording Apportionment of Funds:

(a) On a monthly basis, the OFM Financial Systems Branch prepares an analysis of actual fee collections and provides it to OBP. The Office of Revenue notifies the OBP on a monthly basis of collections received.

(b) From this information, OBP prepares a quarterly apportionment request (SF

132) and submits it through DHS to OMB. OBP receives the OMB approved apportionment and provides it to the OFM Funds Control and Program Support Branch, which enters the new apportionment into CAS.

1 No proprietary entry is recorded for anticipated collections of non-federal revenue (receivables from the public) until actually received.

Part 2 – Chapter 12, Section 11 7

Budgetary Entry To record OMB apportionment to TSA

Account Description Debit Credit 4450 Unapportioned Authority XX

Apportionments - Anticipated Resources – Programs Subject to Apportionment

XX

None

(c) OBP advises the OFM Funds Control and Program Support Branch of subsequent allotments, sub-allotments, and allocations to report in CAS;

allocations are based on the annual operating plans supporting the TSA budget request. Anticipated resources from non-federal sources are not available for obligation, and may not be allocated to TSA staff and program offices until collected. See Section C, Collecting and Posting the HAZMAT Fees for the entry to record anticipated resources when they are collected.

B. Establishing Accounts Receivable:

(1) Recognition of Accounts Receivable:

(a) Candidates in Participating States: Candidates apply online at www.hazprints.com, or contact a TSA customer service agent, who can complete the application over the telephone. Candidates are referred to a fingerprint location, sign the HAZMAT application, submit fingerprints, and provide payment in the amount of $92.75. TSA generally receives applications the next business day.

(b) Candidates in Non-Participating States: Candidates visit their local DMV for an application and fingerprinting information, per their individual state instructions. States must forward biographical and biometric (fingerprint) information to TSA in an approved and established format to facilitate the STA process. Candidates in Non-Participating States pay fees directly to their respective state; the states in turn pay TSA for the Threat Assessment fee for the amount invoiced per the Program Office monthly HAZMAT State Invoice work book. The invoices are created by the 12th business day of each month following the previous month’s close. The states are required to remit payment within 30 days from date of invoicing.

(c) All Candidates: The application process consists of the following checks:

• Fingerprint-based FBI criminal history records check

• Intelligence-related check

• Immigration status check

After TSA receives the candidate’s application and results of the FBI fingerprint check, TSA initiates a STA. The TSA STA is valid for up to five http://www.hazprints.com/�

Part 2 – Chapter 12, Section 11 8 years. CDLs and HMEs are renewed based on a cycle determined by the State in compliance with the Federal Motor Carrier Safety Administration (FMCSA) rules and regulations. The FMCSA has issued a companion rule to TSA’s HAZMAT regulation requiring states to limit their CDL renewal cycles to a maximum of 5 years. A state may choose to require a renewal cycle of less than five years, and certain states have done so, requiring HME holders to renew every four years.

(2) Recording Receivables:

(a) Participating States: For states that process HAZMAT applications through TSA’s contractor, no receivables are established with the states but a receivable is created at the time of receipt of the funds each month. Individual drivers apply directly through TSA’s contractor, which collects all related fees. TSA’s contractor is required to remit all Threat Assessment fees to TSA and all FBI fees to the FBI. If TSA’s contractor does not remit the correct amount of fees by the 10th business day, the Office of Revenue contacts the Program Office to request they contact the contractor for payment. If TSA’s contractor fails to remit the proper amount due, TSA may legally terminate its contract with them.

Because of this contractual arrangement, TSA’s contractor has historically paid on time.

(b) Non-Participating States: For states not using TSA’s contractor, TTAC notifies the Office of Revenue by the 12th calendar day following month close of the detailed amount to bill each state. Non-Participating States are required to remit the Threat Assessment fees ($34.00) to TSA and the FBI fees ($17.25) directly to the FBI.

The Office of Revenue sends FINCEN supporting documentation that allows monthly invoicing to each state for the previous month’s fee collections. FINCEN has until the 15th of each month to send out invoice details to each state. The Office of Revenue sends out an electronic file copy of the details to each respective state supporting the invoiced amount from FINCEN. The states have 30 days from date of invoicing to remit payment to TSA. All states pay through the Electronic Check Processing (ECP) lockbox system. The Office of Revenue performs delinquency notification to states that are late in their remittance.

Budgetary Entry None

Proprietary Entry To record HAZMAT fees receivable from Non-Participating States

Account Description Debit Credit 1310 Accounts Receivable XX 5900 Other Revenue XX

Part 2 – Chapter 12, Section 11 9

C. Collecting and Posting the HAZMAT Fees:

(a) Participating States: The $89.25 fee is submitted directly by the applicants to

TSA’s contractor, which remits a portion of this fee to TSA by the 10th of the following month. The $89.25 fee consists of a $38.00 Information Collection and Transmission fee, which is paid to TSA’s contractor for its efforts and is not remitted to TSA, a $17.25 FBI fee which TSA’s contractor remits directly to DOJ/FBI (as of February 2009), and a $37.50 STA fee, which is remitted to

TSA.

(b) Non-Participating States: Only the $34.00 Threat Assessment fee is collected through FINCEN billing.

FINCEN posts daily deposits of HAZMAT fees to TSA’s budget clearing account “70F3875.” Note: Per Treasury regulations, as of April 1, 2009, all clearing account balances greater than 60 days will be reversed in the accounting system.

Budgetary Entry

On a daily basis, the Office of Revenue retrieves deposit information from the various Treasury systems (CA$HLINK, Pay.Gov, and ECP) and prepares a spreadsheet identifying the individual customer accounts for deposits received. FINCEN uses the spreadsheet provided by the Office of Revenue to credit payments originally posted to the budget clearing account to the correct customer account. Funds collected for the FBI segment of the HAZMAT fee are recorded separately from the other components of the HAZMAT fee.

To record the collection of governmental-type fees Account Description Debit Credit

4260 Actual Collections of “governmental-type” Fees XX

4060 Anticipated Collections From Non-Federal Sources XX

To record receipt of fees Account Description Debit Credit

1310 Accounts Receivable XX 5900 Other Revenue XX

1010 Fund Balance with Treasury XX

(5900) Accounts Receivable (or Other Revenue if no receivable was previously established) XX

D. Budget Execution: Apportionment, Allotment, Sub-Allotment, and Allocation of Funds:

The Anti-Deficiency Act prohibits an accountable official from authorizing an expenditure or obligation of funds in excess of amounts available in an appropriation, apportionment, allotment, or other agency subdivisions of funds. Allotments and sub-allotments are clearly subject to the provisions of the Anti-Deficiency Act. Although it is possible that agency allocations/allowances may not be subject to the Anti-

Part 2 – Chapter 12, Section 11 10

Deficiency Act, TSA policy prohibits any commitments, obligations, and/or expenditures before budget authority is allocated by OBP.

Based on the quarterly apportionment approved by OMB, the monthly notice from the Office of Revenue, and the monthly analysis of fee collections by the OFM Financial Systems Branch, OBP prepares monthly allotments and sub-allotments which are distributed to the TSA program offices. Allotments and sub-allotments are based on the previous month’s actual collections to date (e.g. the allotment for April 2007 would be based on actual collections through March 2007), not to exceed the OMB approved apportionment. OBP further distributes budget authority from the TSA program offices to Managing Unit segments via allocations/allowances.

Since sub-allotments and allocations are considered agency subdivisions of funds, no specific USSGL accounts have been established by Treasury to report these subdivisions. Within CAS, sub-allotments are identified by the combination of the following accounting code data elements plus the 8-digit CAS general ledger account:

Appropriation Code, Budget Year, Program/Project, and Activity.22

Budgetary Entry

TSA allocations in CAS are identified by the following elements plus the 8-digit CAS general ledger account: Appropriation Code, Budget Year, Program/Project, Activity, Sub-Activity, Funding Organization and Managing Unit.

To record TSA allotment Account Description Debit Credit

45900000 Apportionments Unavailable - Anticipated Resources XX

46100100 Allotments - Direct TSA XX To record TSA sub-allotment

Account Description Debit Credit 46100100 Allotments - Direct TSA XX 46100200 Sub Allotments - Direct TSA XX

To record TSA allocation/allowance Account Description Debit Credit 46100200 Sub Allotments - Direct TSA XX 46100000 Allotments – Realized Resources XX

None

22 Beginning FY 2008, the following two data elements will be included in the designation of TSA sub-allotments in CAS: Sub-Activity and Funding Organization. The data elements used to designate TSA allocations will remain the same.