Financial Management Service Essay

1387 words - 6 pages

Introduction:

Financial Management Service acts as the U.S. government's money manager. It is a very important part of the U.S. government.

The FMS provides federal payment, collection, and reporting services for the government. As of today, the Financial Management Service has staffed approximately 2,100 career civil servants one third are located in Financial Centers or RFC's in Austin, TX, Kansas City, MO, Philadelphia, PA, and San Francisco, CA. There is one Debt Collection Center in Alabama. The RFCs issue payments by electronic funds transfer or EFT and paper check, and the Debt Collection Center collects debts older than 180 days on behalf of federal agencies.

Financial Management Service oversees the daily cash flow of nearly $58 billion into and out of federal accounts. The FMS disburses more than $1.5 trillion to more than 100 million individuals by social security and veterans' benefits, income tax refunds and other federal payments.

The FMS collects more than $2.67 trillion per year in payments to the government through 10,000 financial institutions, with more than $2.11 trillion collected electronically. It provides cash management guidance to federal program agencies. Within the government, it serves as the central debt collection agency, managing the government's delinquent debt portfolio, and collects more than $3 billion per year in delinquent debts owed to the federal government.

About the Financial Management Service

Background and History

The Financial Management Service is one of Treasury's newer major bureaus, first as the established as the Bureau of Government Financial Operations in 1974. FMS manages the government's disbursement and collection systems, provides central accounting and financial reporting for government as a whole, and provides guidance to federal program agencies in cash management, credit administration, debt collection, accounting systems, investment management, and the use of technology in financial activities.

It may seem unreal that an organization that performs so many critical functions took so long to come into subsistence, but keep in mind that America did not begin with more than 270 million citizens and a federal budget of more than $1 trillion. The development of FMS and its ancestor organizations were in the perspective of the growth and increasing complication of America's financial system over the path of two centuries.

An Act of Congress created the U.S. Treasury Department on Sept. 2, 1789. The Congress directed the Treasury to provide for the collection, safeguarding, and disbursement of public money, and to maintain a system to account for the government's collections and payments. Even though the collection and control of money is serious to any government, the federal financial communications remained very small for more than 100 years. The Register of the Treasury originally carried out the account-keeping functions. Individual departments and...

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