After the Department of the Treasury issued their final rule on September 25, 1998, all Federal agencies have to comply with the laws and regulations concerning the use of electronic funds transfer (EFT) for most Federal payments, including Federal Travel, starting January 2, 1999. This was required after the President signed into law the Debt Collection Improvement Act of 1996 (DCIA).
Electronic Funds Transfer (EFT) is the preferred method of payment for government payments because it is more secure and less costly for the Government to make an electronic disbursement than a disbursement by paper check. It is more cost effective and efficient to comply with the EFT guidance but one time travelers may be issued checks.
The government makes payment by EFT through either the Automated Clearing House (ACH) network, or the Fedwire Transfer System. Any individual who receives a Federal benefit, wage, salary, or retirement payment can also open a low-cost Treasury-designated account, called an Electronic Transfer Account or ETA, at a financial institution that offers such accounts. It is also required to obtain banking information for an invitational traveler for reimbursement purposes.
But what about those individuals living in areas without financial institutions to access their funds electronically? Waivers to the DCIA are available as long as the requirements are met. Treasury provides a hardship waiver for those individuals for whom payment by EFT would impose a hardship to their geographic location. Foreign Payment – Where the political, financial, or communications infrastructure in a foreign country does not support payment by electronic funds transfer. Example: Columbia does not accept EFT payments. Confidential - the national security may be threatened, the life or physical safety of any individual may be endangered, or a law enforcement action may be compromised. Example: Witness travel.
This rule can also provide a waiver for individuals when the cost to the recipient of receiving a payment by EFT is greater than the cost of receiving payment by check and would cause the recipient a financial hardship. In addition, the requirement to receive payment by electronic funds transfer may automatically be waived for individuals who do not have an account with a financial institution.
By: Debbie Hardman
“The views expressed are those of the author and do not necessarily reflect the position of the Bureau of the Government or my Agency.”