fmm 2.12.12 - TWIC fees.pdf

TSA Financial Management Manual March 9, 2009

Part 2 - Chapter 12, Section 12

TRANSPORTATION WORKER IDENTIFICATION CREDENTIAL FEES

1. PURPOSE

The purpose of this section is to provide instructions on the proper accounting and reporting of fee collections for the Transportation Worker Identification Credential (TWIC) program.

The TWIC program is a TSA and U.S. Coast Guard initiative. This program provides a tamper-resistant biometric credential to maritime workers requiring unescorted access to secure areas of port facilities, outer continental shelf facilities, vessels regulated under the

Maritime Transportation Security Act and all U.S. Coast Guard credentialed merchant mariners. An estimated 750,000 individuals will require TWICs. To obtain this certification, an individual must provide biographic and biometric information such as fingerprints, sit for a digital photograph and successfully pass a Security Threat Assessment (STA) conducted by

TSA. This assessment is the same for those applying for, transferring, or renewing a

Hazardous Materials Endorsement (HME) on a state-issued Commercial Driver’s License

(CDL).

The TWIC fee is currently assessed at $132.50 and includes the costs for the STA, program management, card production, and issuance. Workers with current, comparable background checks (HME, Merchant Mariner Document (MMD), certificate of registry, merchant mariner license, or Free and Secure Trade (FAST) card) will pay a discounted fee of $105.25.

2. POLICY REFERENCES

Aviation and Transportation Security Act, Public Law Number 107-71, Volume 115

Statute 597 – authorizes TSA to perform background checks and issue credentials to workers within the national transportation system.

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.

Maritime Transportation Security Act of 2002, Public Law Number 107-295, Volume

116 Statute 2064 – requires DHS to prescribe regulations to prevent individuals from entering an area of a vessel or facility that is designated as a secure area by DHS unless the individual: (A) holds a transportation security card issued in accordance with DHS regulations, and is authorized to be in the area in accordance with the vessel or facility

SOP security plan; or (B) is accompanied by another individual who holds a transportation security card issued in accordance with DHS regulations and is authorized to be in the area in accordance with the vessel or facility SOP security plan.

Security and Accountability for Every Port Act of 2006 (SAFE Port Act), Public Law

Number 109–347, Volume 120 Statute 1884 – authorizes DHS to issue transportation security cards to individuals with unescorted access to secure areas in vessels or port facilities.

TSA Financial Management Manual March 9, 2009

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, garnishment actions, and dissemination of information regarding the identity of delinquent debtors.

Title 31 Code of Federal Regulations Part 901 – outlines the actions an agency must follow regarding debt collection actions, debt reporting, penalties and administrative fees, and installment repayment agreements.

Title 49 Code of Federal Regulations Part 89 – implements the Federal Claims Collection

Act of 1996 which permits TSA to seek civil penalties for collection amounts not remitted by the established due date.

Office of Management and Budget (OMB) Circular A-25, Transmittal Memorandum #1, User Charges (July 8, 1993) – establishes Federal policy regarding fees assessed for

Government services.

31 Code of Federal Regulations Part 210 – governs all entries and entry data originated or received by an agency through the Automated Clearing House network.

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 – An umbrella term for amounts owed 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, 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.]

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

Government.

o 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, approved by the Federal Reserve (oversight authority) which provides for the interbank clearing of electronic payments for participating depository financial institutions. The ACH system connects banks to one another by way of the Federal

Reserve Banking System and other ACH operators.

TSA Financial Management Manual March 9, 2009

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 – These are accounts established by Treasury to temporarily hold unidentified general, special, or trust fund collections that belong to the U.S. 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.

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.

o Undistributed intragovernmental 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.

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 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.

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-New York.

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

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. The service includes collecting the mail from a specified post office box, which includes sorting, totaling, and recording of payments and deposits. The financial institution forwards copies of all documentation to FINCEN for processing of collections into CAS.

Pay.gov – A web based portal developed by the Department of Treasury which enables individuals and businesses to securely and easily send electronic payments to the U.S.

Government by debit/credit card or ACH debit of a savings or checking account.

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

TSA Financial Management Manual March 9, 2009 o Exchange Revenue – Inflows of resources to a governmental entity that it has earned. They arise from exchange transactions, that occur when each party to the transaction sacrifices value and receives value in return (i.e., when goods or services are exchanged).

o 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.

Security Threat Assessment (STA) – An assessment made by TSA to determine if an applicant is a threat to the national transportation system and/or national security. The first step is collecting of information for a name-based threat assessment by running names through law enforcement, immigration, terrorist-related, and intelligence data sources both classified and unclassified. In addition to using government databases, TSA authenticates the identity of the applicant by commercial data to reduce the risk of identity fraud and inhibit identity theft. The second step is a fingerprint-based check of appropriate law enforcement, intelligence, immigration, and terrorist-related databases.

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

USSGL – U.S. Government Standard General Ledger; the chart of accounts established by Treasury for use by Federal agencies. It incorporates a basic 4-digit USSGL account plus applicable attribute domain values that agencies must capture at the transaction level.

The USSGL consists of both proprietary and budgetary accounts, which are self-balancing (total debits equal total credits).

4. RESPONSIBILITIES

The accurate accounting of TWIC fees involves the coordinated efforts of TSA’s Office of

Budget and Performance (OBP), Office of Revenue, Office of Financial Management (OFM), Transportation Threat Assessment and Credentialing (TTAC) office, and FINCEN. Since each entity acts as an accountable official, it is important each accomplishes its financial stewardship responsibilities.

The OBP is responsible for apportionment, budget formulation and budget execution, including the timely allocation of budgetary authority to TSA program activities when

TWIC fees are collected, and identifying mandatory appropriation codes in CAS.

The Office of Revenue is responsible for ensuring its contractor remits collected TWIC fees on a monthly basis. Fees received should be posted and processed timely and accurately to CAS. Additionally, delinquent receivables must be collected and/or referred to Treasury. The Office of Revenue is also responsible for periodically conducting fee reviews.

The OFM Accounting Branch is responsible for aging delinquent receivables and coordinating with the Office of Revenue and FINCEN to ensure accurate posting of unidentified remittance amounts in TSA’s budget clearing account.

TSA Financial Management Manual March 9, 2009

The OFM Financial Statements and Reports Branch is responsible for preparing the quarterly accounts receivable accrual from TWIC fees to be included in the quarterly financial statements.

The OFM Financial Systems Branch is responsible for managing the technical operations of the TSA accounting system.

The OFM Funds Control and Program Support Branch is responsible for the accurate posting of budget execution transactions in the TSA accounting system.

The TTAC office is responsible for managing the TWIC program. TTAC will establish enrollment centers within close proximity of port facilities. The centers will collect biographic information and fingerprints from applicants to conduct an STA to facilitate producing the credential. Once a worker is approved after favorably completing this process, TTAC will issue the credential to the worker.

FINCEN is responsible for posting the TWIC fee receipts into CAS after coordinating any unresolved issues with the Office of Revenue and the OFM Accounting Branch.

5. PROCEDURES

Within TSA’s scope, the key processes for managing the TWIC fees are as follows:

Budget formulation and apportionment of funds

Establishing accounts receivable

Collecting and posting TWIC fees

Budget execution: allotment, sub-allotment, and allocation of funds

Transferring collected FBI fees to the U.S. Department of Justice, Federal Bureau of

Investigation

A. Budget Formulation and Appropriation of Funds

(1) Establishing the TWIC Fee:

(a) The standard fee for obtaining a TWIC is $132.50 and will be valid for two years. The fee includes the cost for the security threat assessment, program management, card production and issuance.

(b) Workers with current and/or comparable background checks including a HME on a CDL, MMD or FAST credential will pay a discounted fee of $105.25.

(c) A Card Replacement Fee of $60.00 is the amount that an applicant would pay to replace a credential that has been lost, stolen, or damaged.

Standard TWIC Fee

Enrollment Segment: $43.25

Full Card Production/STA Segment (for Individuals requiring a full STA): $72.00

FBI Segment: $17.25

Total $ 132.50

Reduced TWIC Fee

Enrollment Segment: $43.25

Reduced Card Production/STA Segment (for Individuals not requiring a full STA): $62.00

Total $ 105.25

Card Replacement Fee

Card Replacement Segment: $60.00

TSA Financial Management Manual March 9, 2009

(2) Forecasting the Annual Fee Revenue:

(a) The Office of Revenue is responsible for forecasting the annual TWIC fee revenue.

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

(3) Recording Direct Appropriations: The TWIC program does not receive direct appropriations.

(4) Recording Anticipated Collections:

(a) The OFM Funds Control and Program Support Branch records the anticipated amounts of non-federal collections and apportionments of TWIC fees based on quarterly SF 132 (Apportionment and Reapportionment Schedule) forms approved by the Office of Management and Budget (OMB), and supporting schedules provided by the OBP. This occurs for each SF 132 approved by the

OMB during the fiscal year. TSA is not permitted to incur obligations against these anticipated resources, considering they are from non-federal sources.

(b) Anticipated collections are recorded for the anticipated annual TWIC fee revenue. The amount recorded is based on the forecast by the Office of

Revenue included in the TSA budget request, and reported on the SF 132.

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 TWIC fees

Account Description Debit Credit

4060 Anticipated Collections From Non-Federal Sources XX

4450 Unapportioned Authority XX

Proprietary Entry

None

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

TSA Financial Management Manual March 9, 2009

(5) Recording Apportionment of Funds:

(a) On a monthly basis, the OFM Funds Control and Program Support Branch prepares an analysis of actual fee collections which it provides to OBP. In addition, 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. Upon receipt of the OMB approved apportionment, OBP conveys the data to the OFM Funds Control and

Program Support Branch, which enters the new apportionment into CAS.

Budgetary Entry

To record OMB apportionment to TSA

Account Description Debit Credit

4450 Unapportioned Authority XX

Apportionments - Anticipated Resources –

Programs Subject to Apportionment

XX

(c) Unless collected, anticipated resources from non-federal sources are not available for obligation, and may not be allocated to TSA program offices.

B. Establishing Accounts Receivable

(1) Recognition of Accounts Receivable:

(a) The enrollment process consists of the following components:

i) optional pre-enrollment,

ii) in-person enrollment,

iii) fee collection,

iv) notification of the STA results, and

v) issuance of the TWIC to the applicant.

(b) Applicants may pre-enroll online by entering all biographic information required to evaluate the threat assessment. To complete the process, an applicant can make an appointment at the enrollment center. Each applicant is required to sign a TWIC Application Disclosure Form, provide biographic information, a complete set of fingerprints, sit for a digital photograph, and pay the assessment fee at the enrollment center. The applicant must provide identity verification documents for enrollment. In the case of aliens, immigration documents are required to verify their immigration status. All documents will be scanned into the electronic enrollment record database.

TSA Financial Management Manual March 9, 2009

(c) Almost immediately, TSA will incur costs associated with the STA analysis.

TSA will not conduct an analysis until the required information is received from TSA’s contractor. Fee revenue is earned from the TWIC program upon completion of STA analysis, which usually takes five days.

(2) Recording Receivables:

(a) Individual applicants apply directly through TSA’s contractor, who collects all

TWIC fees. TTAC’s contractor is required to remit fees collected to TSA by the 10th business day following the month’s close. Because of the short duration between fee collection and completing STA analysis, TSA does not record a receivable from TSA’s contractor in the normal collections cycle.

(b) If TTAC’s contractor does not remit the correct amount of fees by the 10th business day, the Office of Revenue notifies TTAC’s contractor to remit payment. Collection activities will commence if TTAC’s contractor fails to remit the proper amount of fees due to TSA, including the recording of an account receivable from the contractor.

C. Collecting the TWIC Fees

(1) TTAC sends applicant information to the Office of Revenue and FINCEN. The

Office of Revenue reconciles the list of applicants and fees from the TTAC with the same information included in its contractor’s payment reports.

(2) Upon receipt, FINCEN posts daily deposits of TWIC fees to TSA’s budget clearing account “70F3875.” 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 TWIC fee are recorded separately from the other components of the TWIC fee.

Budgetary Entry

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

Proprietary Entry

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

TSA Financial Management Manual March 9, 2009

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

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

(2) Based on the quarterly apportionment approved by OMB, the monthly notice from the Office of the Revenue, and the monthly analysis of fee collections by the OFM

Funds Control and Program Support 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 latest OMB approved apportionment. OBP further distributes budget authority from the TSA program offices to Managing

Unit segments via allocations/allowances.

(3) 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 8-digit CAS general ledger account plus the following accounting code data elements: Appropriation Code, Budget Year, Program/Project, and Activity.

TSA allocations in CAS are identified by the 8-digit CAS general ledger account plus the following accounting code data elements: Appropriation Code, Budget

Year, Program/Project, Activity, Sub-Activity, Funding Organization and

Managing Unit.

Budgetary Entry

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

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.

TSA Financial Management Manual March 9, 2009

E. Transferring FBI Fees to U.S. Department of Justice

(1) On a daily basis the Office of the Revenue calculates the portion of TWIC fee collections related to the FBI background check and provides this figure to the

TTAC office, the OBP, the OFM Accounting Branch, and FINCEN. FINCEN records revenue from fees collected for FBI background checks separately from the other fee revenue using a unique revenue activity code.

(2) TTAC has an interagency agreement (IAA) with FBI for receiving fingerprint submissions and performing background checks for all TWIC applicants. TTAC periodically modifies the IAA to extend the period of performance and provide incremental funding as fees are collected. TTAC obligates funding for the IAA after OBP allocates resources from fee revenue collected. The line of accounting in the IAA is used to record the payment of FBI invoices and includes the valid revenue activity code for the program (TWIC = RE0FB7).

Budgetary Entry

To record obligation of funds for IAA with FBI

Account Description Debit Credit

4610 Allotments - Realized Resources XX

4801 Undelivered Orders - Obligations, Unpaid XX

(3) On a monthly basis, FBI sends an invoice to TTAC for all background checks performed on TWIC applicants during the billing period. The TTAC office verifies that all submitted charges from the FBI’s monthly invoice match the

TTAC database of candidates for the same period and instructs FINCEN to execute a transfer of funds to the FBI via the Department of Justice for its portion of fees collected.

Budgetary Entry

To record approval of FBI invoice for payment

Account Description Debit Credit

4801 Undelivered Orders - Obligations, Unpaid XX

4901 Delivered Orders - Obligations, Unpaid XX

TSA Financial Management Manual March 9, 2009

To record approval of FBI invoice for payment

Account Description Debit Credit

6100 Operating Expenses/Program Costs XX

2110 Accounts Payable XX

(4) Funds are transferred via the Intra-Governmental Payment and Collection (IPAC) process. FINCEN then posts the transfer of funds to CAS.

Budgetary Entry

Proprietary Entry

To record payment of FBI invoice scheduled with Treasury

Account Description Debit Credit

2110 Accounts Payable XX

2120 Disbursements in Transit XX

Budgetary Entry

To record Treasury confirmation of payment for FBI invoice

Account Description Debit Credit

4901 Delivered Orders - Obligations, Unpaid XX

4902 Delivered Orders - Obligations, Paid XX

Proprietary Entry

To record Treasury confirmation of payment for FBI invoice

Account Description Debit Credit

2120 Disbursements in Transit XX

1010 Fund Balance With Treasury XX