The DCIA also indicated that Federal payments may be offset to collect delinquent debts owed to States, if the States enter into reciprocal agreements with the Secretary of the Treasury and meet certain other qualifications. The DCIA authorizes the U.S. Department of Treasury to allow States to participate in administrative offset to collect delinquent State debts as long as the States meet the requirements, including entering into reciprocal agreements with the U.S. Department of Treasury. Such reciprocal agreements shall contain any requirements that the U.S. Department of Treasury considers appropriate, to facilitate offset and prevent duplicative efforts. The Federal Payment Offset process has been developed to allow States to use Federal payments to be applied towards state debts.
A number of new pages and batch jobs have been added, and the existing intercept functionality has been modified, to support both State and Federal Payment Offset functionality. For more information, please refer to the online help application.
The Federal Payment Offset process begins when eligible past due debts for Federal Payment Offset have been identified.
The Intercept Selection job is used to load the eligible Internal Debts (Receivables) to the Intercept Request (INTR) table and the External Debts are loaded to the INTR table by online data entry or creating the IRM transaction.
The Federal Debt Update File Generation job is used to select eligible State debts from the INTR table and load the selected debts to the FOTR table. The job then selects records from FOTR and generates the Debt Update File, which contains the new and updated debt records to be sent to the Bureau of Fiscal Service (BFS).
BFS verifies the validity of the debtor records received from Advantage.
If errors occur, BFS generates an Unprocessable File with Error Codes for unprocessable records. The Federal Unprocessable File job updates the unprocessable records on the FOTR table with the appropriate error codes.
An authorized Advantage user needs to fix the errors by manually creating IRM transactions to update the corresponding records on the INTR table, or should request the associated agencies to fix the errors and send in the fixed records. The fixed debt records are then resent to BFS via the Debt Update File in the next cycle. Alternatively, an authorized user can fix the errors in the BFS online portal.
BFS matches the records with the Federal Non tax payee. BFS creates a Collection File.
The Federal Collection File job loads the Collection File (offset/reversal information received from BFS in ERL format) to the Federal Offset tables (Federal Offset Request (FOTR), Federal Offset Summary (FOTS), and Federal Offset Activity (FOTA)) and to the Intercept Request (INTR) table.
EFT payments are received from BFS.
The Generate Federal Offset Payment chain job generates the Federal Offset Transfer (ITO) and GA Federal Offset Payment (GAOP) transactions to transfer the funds and liquidate the Receivable (RE) transactions. The ITO and GAOP transactions will be manually modified or created to handle reversal requests in the Collection Files from BFS.