BOP Program Statement 8532.08 § 10

be disbursed centrally. A designated certifying officer will

process all payment runs daily or weekly, depending on the

criteria established by FMB management.

Disbursements can be made for the payment to vendors, staff (i.e.

travel), institution billings, transportation, etc. There are

several payment methods associated with each payment run,

depending on the type of payment:

• A - Treasury Check

• T - EFT/ACH

• G - GOALS (i.e. payments to other government agencies)

• N - No check (i.e. institution bills, inmate payroll,

civilian payroll)

The Disbursing and Budget Officer must ensure a payment run(s) is

initiated after the spending limit has been authorized.

The system is not limited to processing one payment run, but may

generate several depending on the number of proposals created.

Each payment run can be for a specific account group and/or

payment method.

Payment run(s) will be transmitted automatically to Treasury

daily. Therefore, to ensure payments are not rejected due to

blocked invoices, the vendor database must be updated constantly.

a. Validation of Vendor ABA Numbers. During the payment run

process, the Treasury ACH file will be matched to the existing

Vendor Master in the integrated system. If the files do not

match, the system will “drop” the vendor and block the payment.

The ACH Coordinator must be notified promptly of any changes

required to the vendor data base regarding erroneous banking

information.

The applicable location must contact the vendor within 24 hours

of the payment run to obtain an updated ACH Vendor/Miscellaneous

Payment Enrollment Form or correct banking information. Upon

receiving the correct banking information, the field location

must submit this information promptly to the ACH Coordinator.

The ACH Coordinator must enter the data into the Vendor Master

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immediately and remove the block for payment processing, placing

the voucher back in the payment Queue, to be included in a future

proposal and/or payment run.

b. Pre-Payment Error Reports. Prior to a payment run each

field location must execute a “Pre-Payment Error Report”

identifying payments which would not be included on a payment

proposal due to errors. All locations must generate, review, and

correct any errors existing on this report weekly.

c. Interest Run. Prior to executing the proposal and/or

payment run, the certifying officer must generate an interest

payment run or “calculate vendor interest on arrears.” This

transaction will calculate interest on over due line items and

will produce an interest arrears letter for each vendor. There

are two range types associated with running interest for vendors:

T Z1 - interest (non-government)

T Z2 - no interest (government)

The Z1 range will be used to calculate interest. In addition,

the calculation period should be through the ending date for all

vouchers that will be considered.

Due to the centralized disbursement, the system consolidates

all payments including interest for each vendor. Therefore, the

vendor will receive only one lump sum payment via the payment

method indicated for the payment run.

However, the system will generate a detailed interest arrears

letter for each vendor with accrued interest. Therefore, it is

imperative that the Disbursing and Budget Officer or designee

ensure the “Interest Arrears Letter” generated during the

interest run segment, stating the amount of the interest penalty,

invoice number, number of days late, and the rate used to

calculate the interest is sent promptly to the applicable vendor.

In addition, the system generates a report list detailing the

dollar amount for each vendor. This report must be signed by the

certifying officer and maintained with a copy of the interest

letter in a chronological file for audit purposes.

d. Payment Proposals. The certifying officer is to generate

via the Accounts Payable Module, a Payment Proposal List for the

specific time period (i.e. entire week or day) for those vouchers

to be included in the payment run. The certifying officer must

sign the Payment Proposal List and provide it to the FPI

Controller and/or Deputy Controller to use for establishing the

authorized spending limit.

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< Weekly Projections. Weekly, the certifying officer

will generate a payment proposal for the designated

time frame. To include all vouchers due and waiting to

be paid, enter the run date which is equivalent to the

current date and the next projected payment run’s date.

This will capture all invoices due within this time

frame and all past due invoices.

< Daily Projections. Using the same procedures as stated

above for weekly projections, the certifying officer

will generate a payment proposal daily.

The payment proposal generated must be printed and submitted

for the FPI Controller and/or Deputy Controller to review and

approve the spending limit. If the authorized spending limit is

less than the proposal (weekly or daily), the Certifying Officer

must review and determine which payment(s) will not be included

in the payment run.

The Certifying Officer must block those voucher(s) identified

for exclusion with an “L” for limited spending, until the

authorized spending limit has been met. If a payment proposal

contains an error (i.e. used wrong dates), the proposal can be

reset and regenerated with the correct information.

However, during critical cash flow deficits, FMB will notify

staff of procedures to be followed for submitting and paying

critical vendors.

e. Schedule Number (Identification Number). The schedule or

identification number is a five digit field the certifying

officer creates. However, this number must contain the fiscal

year in the first field and the other four must be in numerical

sequence (i.e. 00005, 00006, 00007). There are two exceptions:

< the schedule numbers for no check payment runs will

begin with “N” and

< civilian payroll will begin with “CP,” followed by the

sequential numbering scheme.

To avoid duplicate schedule numbers or identification numbers,

a log book must be maintained to record schedule numbers or

identification numbers. The log must contain:

< the schedule number,

< date of the payment run,

< dollar amount by payment method identifier (i.e. A, G,

T, or N),

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< date file was created,

< the date the Electronic Certification was verified, and

< staff initials.

f. Account Groups. There are six vendor account groups

designated for use in the integrated system. These account

groups are used to identify which group of vendors will be

included on a payment run (i.e. transportation). These account

groups also segment the different vendor types on the payment run

for internal and external reporting.

At Central Disbursement’s discretion, vendors can be added to

isolate a group of vendors. The following are valid account

groups used in the integrated payment system:

< 0001 - regular vendors

< 0002 - remittance address vendor

< 0008 - transportation

< 0009 - staff

< 0010 - institution

< 0011 - goals billing

g. Payment Runs. The certifying officer must execute the

payment run and generate a “Payment Proposal List and Exception

List.” The Exception List details items identified on the

payment run, but which failed for various reasons. If the

payments listed on the exception list are to be included in the

payment run, the applicable location (i.e. field or Central

Office) must make a correction.

Multiple payment run(s) can be executed for the different type

of account groups depending on the authorized spending limit.

However, because GSA still requires submitting a schedule

identifying paid transportation vouchers, this account group must

be executed independently of all others. In addition, a payment

run must be executed daily for the payment of drafts.

After completing the payment run, data files are created for

the different payment types (i.e. check, ACH) for transfer to

Treasury. MISB transmits these data files daily to Treasury. If

an error is detected after the payment run data files have been

created, Central Disbursement must reverse and reset those

errors.

It is MISB’s responsibility to notify Central Disbursement of

any errors contained in the data file. If the data file is

deleted it must be resubmitted within 24 hours. In addition,

MISB must notify Central Disbursement of the new file schedule

number.

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After the payment run has been completed, the system will

generate the “Diskette Accompanying Sheet” automatically. The

Certifying Officer responsible for transmitting the payment file

must sign and maintain this report in chronological order.

Upon transmission to Treasury, the Disbursing and Budget

Officer must receive a printout of a pre-edit file forwarded from

the MISD. The pre-edit report and Payment Settlement List is

used for electronic verification purposes.

h. Electronic Certification System. After transmission of a

payment run, the certifying officer must compare the dollar

amounts from the “Payment Settlement List” generated during the

payment run process to the Pre-edit report.

The data from the pre-edit report is used to verify information

received by Treasury. The Department of Treasury’s Electronic

Certification System (ECS) is used to verify this information. A

DEO or designee must enter the following applicable information

from the pre-edit report into ECS:

< Control Number

< Number of Payments

< Dollar Amount, and

< Schedule Number

i. Payment Run File Folders. The Disbursing and Budget

Officer must maintain a file for all payments runs Central

Disbursement generates. Each folder must contain the following

information:

T Proposal Exceptions List

T Proposal Log

T Payment Settlement List

T Payment Summary List

T Diskette Accompanying Sheet

T Pre-Edit Report

T CCD Error List (MISB)

T Screen Prints of the Reset/Reversed Items from the

“Item” button option

T ECS Certification Report

T Treasury Confirmation Report