3.1 Purpose. This chapter defines the policies and responsibilities which govern the processing of vouchers, billings, invoices, and claims that serve as the basis for making payments for goods and services furnished to Service organizations. Employee vouchers for travel and transportation expenses are covered in Part 265, Travel.
3.2 Scope. The provisions of this chapter apply to all persons who process payments for the Service.
3.3 Responsibilities of Field Offices.
A. Field office managers and their assistants involved in processing payments must know and carefully apply the procedures in this chapter. Additionally, they must be familiar with other information essential to the processing of payments; Principals of Federal Appropriations Law, Federal Acquisition Regulations, United States Codes and other rules and regulations pertaining to Government spending.
B. Field offices are not authorized to make final determinations with respect to any claim or to enter into any disputes, negotiations, or correspondence with claimants other than to secure additional information needed to process routine transactions. Doubtful claims of any sort will be promptly referred to the Regional Office, as appropriate, for handling with all pertinent information that may be available at the station. Such action is necessary to preserve claimants' rights especially if the statute of limitations is close to expiration (6 years, according to Title 31 U.S.C. 3702).
3.4 False or Fraudulent Actions. All employees who process payment documents should be aware of the significance of any false or fraudulent actions under the Criminal Code. Portions of the code include:
A. Title 18 U.S.C. 287, False, fictitious or fraudulent claims:
"Whoever makes or presents to any person or officer in the civil, military, or naval service of the United States, or to any department or agency thereof, any claim upon or against the United States, or any department or agency thereof, knowing such claim to be false, fictitious, or fraudulent, shall be fined not more than $10,000 or imprisoned not more than 5 years, or both."
B. Title 31 U.S.C. 3729, False Claims, imposes a maximum fine of $2,000 in addition to twice the amount of damages the Government suffers, for knowingly aiding or abetting a false claim.
3.5 Obtaining Billings. Vendors submit requests for payment for goods and services furnished to the ordering/issuing office. Billings may be submitted on commercial letterhead or invoice form, SF-44 (Purchase Order - Invoice - Voucher), or
SF-1034 (Public Voucher for Purchases and Services other than Personal). Vendors who do not have formal invoices or
pre-printed letterhead may submit claims as described below:
A. Purchase Order. If a purchase order (Form 3-2103) was issued for procuring goods or services, the vendor may submit:
(1) A request for final payment, by completing the back of the original form; or,
(2) A request for partial payment, by completing the back of a copy of the original form.
(3) In either case, the vendor or vendor's representative must provide an original signature and return the form to the ordering/issuing office for processing.
B. Other Forms. The vendor may prepare a request for payment on a blank piece of paper, ensuring that all critical elements are addressed as identified in 3.6 below. Claims of this type must also contain the original signature of the vendor or a vendor's representative. Vouchers for freight and transportation services are sent directly to the Finance Center as instructed on bills of lading and transportation requests.
C. Non-receipt of Billings. The field office may request a billing when goods and services have been ordered and received and no billing has been submitted by the vendor. Billings should not be requested before receipt of the goods or services or expiration of the period for which a rental payment is to be made. Title 31 U.S.C. 3324, Advances, prohibits advance payments except for subscriptions to newspapers, magazines, other periodicals and publications, including books. The prohibition does not apply to payments to other Federal agencies such as the U.S. Postal Service for rental of post office boxes.
D. Form of Billings. Billings should be prepared in an original and one copy, preferably on the vendor's letterhead or invoice form. The original is to be forwarded to the Finance Center and the copy retained for the ordering offices' records. Some vendors use carbon or reproduced copies of invoices for billing purposes. This form is acceptable provided only one copy includes a notation marked as "Original" or "Customer Copy." Other copies should be clearly marked "Copy."
3.6 Checking Billings. Field offices should carefully review billings to ensure they are complete and accurate before they are forwarded to the Finance Center for payment. Office personnel may not alter, modify, or adjust (except as authorized below) any information on or omitted from a vendor's invoice. Any invoice not containing the minimum requirements must be returned to the vendor for correction. The minimum information that will be required on a billing consists of the following items, which are the vendor's responsibility to identify:
A. Name/Location on Billing.
(1) Billings should normally be accepted only in the name of the payee as it appears on the purchase order, contract agreement, etc. However, the billing may show a different name in the case of a decedent, or change in the name of a corporation or assignment of the claim. The Finance Center will determine whether the billing can be paid in the name of the claimant or if modification is necessary. Supplementary legal documents may be required to establish entitlement to the amount claimed to satisfy requirements of the Assignment of Claims Act (Title 41 U.S.C. 15).
(2) Claimants must provide a complete mailing address to ensure prompt delivery of payments, and to reduce the number of checks returned by the U.S. Postal Service due to insufficient delivery instructions.
(3) Claimants located in remote/rural areas should make an extra effort to provide as accurately as possible a descriptive physical location of their place of business, residence, or other origin of delivery.
(4) When claimant's invoices show various locations, but do not specify a desired remittance address, the issuing/ordering office must confirm/notate the proper delivery address prior to submission to the Finance Center for processing.
B. Itemization of Articles or Services. Itemization is required in sufficient detail to accurately describe the articles delivered or services rendered. Stock numbers, catalog numbers, etc., are not an acceptable form of itemization.
C. Unit Price, Quantity, Extensions of Amounts and Total. The billing should identify the unit price for each individual item, extensions for the quantity of each, and total amount claimed.
D. Billings Paid in Foreign Currency. Billings are paid in foreign currencies when required.
E. Computation Errors. In the event of obvious computation errors, the following guidelines will be followed when adjusting a vendor's claim:
(1) A vendor's claim may not be increased in excess of $10.00.
(2) If a vendor's claim is understated in excess of $10.00, the invoice will be paid as claimed.
(3) Computation errors that have been corrected according to the guidelines above should be neatly lined out and the correct figures notated. In the event that a claim is decreased, the vendor will be notified via a Notice of Action Taken, form DSC 6.
F. Prepaid freight, Express, and Parcel Post. Delivery terms should be accurately stated.
(1) "FOB-Destination" means shipped free of Government expense to a specified delivery point where a Government facility is located. The contractor is responsible for paying all shipping charges to the point of delivery specified in the order.
(2) "FOB-Origin" means that the Government will incur any expenses related to the shipment of the order to the point of delivery specified in the order. It is the contractor's responsibility to pre-pay the freight charges, and claim reimbursement by billing the Government. If freight charges are in excess of $100.00, the vendor must also provide a copy of the pre-paid freight bill or other proof of payment identifying the actual amount of charges.
G. Insurance Charges. Excess valuation insurance charges are not an allowable expense. It is the long-standing policy of the Government to assume its own risks. The established rule is that, unless provided by statute, appropriations made available for Government activities are not considered applicable for the purchase of insurance to cover loss or damage to Government property. For further guidance, refer to the Principles of Federal Appropriations Law.
H. Posted Price at Time of Delivery. Contracts for bulk petroleum purchases involving payments which use the "posted price at time of delivery" as the base must indicate the posted price and show taxes, if included.
I. Other Needed Information. The following information must be stated or added by the field offices either to the vendor's billing, the receiving report copy of the purchase order, or other supporting documents.
(1) Contract Number. If articles or services are procured under a contract, the contract number should be identified.
(2) Date of Acceptance. The date the articles or services were accepted.
(3) Invoice Received Date. The date the invoice was received at the field office.
(4) Tax Exemption Certificates. The Federal Government is generally exempt from State and local taxes as well as Federal excise taxes. Questions in regards to exceptions to this rule should be referred to the Regional Finance Offices. Exempt taxes included in a billing should be subtracted by the field station from the total billed. The Finance Center will provide written notification to the vendor informing him/her of the deduction. The serial numbers of any tax exemption certificates issued to the vendor should be stated on the billing or purchase order.
(5) Identification of Government Equipment. When expenses are incurred in connection with Government equipment, the particular vehicle or other equipment involved should be identified by annotating the serial number, license tag number, or property number of the equipment.
(6) Long-Distance Telephone Calls.
(a) Charges for long-distance telephone calls require the following certification: "Pursuant to Section 4 of the Act approved May 10, 1939 (53 Stat. 738) I certify that the use of the telephone for the official long-distance calls listed herein were necessary in the interest of the Government."
(b) When personal telephone calls are included, the details should be stated on the billing and total charges for the calls, including tax, is annotated on the billing. A collection transmittal must be prepared and forwarded to the Finance Center, with the payment from the employee.
(7) Receiving Employee Signature. All invoices must include the signature of an individual who has personal knowledge that the services/goods were received. This is accomplished by completing the agency approved "block stamp" or signing the back of the purchase order receiving form.
3.7 Special Statements and Explanations. Certain transactions will require detailed explanations to furnish information needed by the Finance Center to substantiate payment of the billing. These explanations or statements should normally be typed on separate sheets which should be attached to the billing.
A. Personal and Unusual Procurements. Ordinarily, the purpose of a procurement will be obvious to the paying office and it will not be necessary to explain it. However, when the transaction is unusual, or involves an item of a personal nature, a full explanation of the need for the articles or services should be prepared.
B. Exceptions to Amounts Billed. Unauthorized shipping charges, exempt taxes, discounts and over-stated claims will be subtracted by the field office from the total billed amount. When a manager is unable to approve the full amount of a vendor's billing for other reasons such as incomplete deliveries, delivery of articles of inferior quality to those ordered, damage, errors in unit prices, etc., a statement of exceptions should be prepared and attached. This statement should outline clearly why the station manager believes that the amount claimed is improper and state what portion is authorized.
C. Lost Documents. In the event receiving report copies of purchase orders are lost, a statement explaining the loss should be prepared and attached to the billing. Similarly, the loss or absence of other documents supporting the billing should be explained.
3.8 Discounts. Discounts are of two types: trade and time.
A. Trade Discounts. Trade discounts are reductions from the list price for a class of customer such as a retailer or Government agency. The discounts usually run higher than 2 or 3 percent and are usually deducted from the billed price by the vendor. If the billed price does not exclude a trade discount to which the Government is entitled, it will be subtracted by the field office from the total billed with a notation such as "Less trade discount 10%, $_____, Net $_____."
B. Time Discounts.
(1) Time discounts are reductions from the invoice price that may be made for payment within a specified period such as 10 or 20 days and offers are printed, typed, or stamped on billings as 3%-10 (3% if paid in 10 days) or, 2%-20 (a second option of 2% if paid after 10 but before 20 days).
(2) The beginning day of the discount period is the vendor's billing date. Refer to the OMB Circular A-125, Prompt Payment, for further guidance. If a billing is returned for correction, the discount period begins the day of receipt of the corrected billing. The closing day of the discount period is the day on which the check is mailed by the Department of the Treasury, not the day it is received by the vendor. If the last day of the discount period falls on a Sunday, or legal holiday, payment on the following day will be considered as within the discount period. A discount should be taken if one is offered on the billing even though the purchase order or contract may provide for net payment terms.
(3) Billings that contain time discounts should be mailed to the Finance Center clearly marked "Discount." Discounts under $1.00 will not be taken, as it would not be economically justified to give these documents special handling.
3.9 Billings from Other Agencies. Goods and services may be furnished to one Government agency by another on a reimbursable basis under Section 601 of the Economy Act ( Title 31 U.S.C. 1535 & 1536) or similar provisions of law. The agency that furnishes the goods or services normally will issue billings only after receipt by or actual shipment of the goods to the ordering agency. Each bill should readily identify the order for which it is issued. The law provides: "Bills rendered...pursuant to any such order, shall not be subject to audit or certification in advance of payment." Government agencies should be encouraged to bill via Treasury's Online Payment and Collection System (OPAC) to eliminate delays in processing billings.
3.10 Forwarding Billings to the Finance Center.
A. Assembly of Billings. Vendors' billings and supporting documents should be secured together in the following order: Original billing (as identified in 3.5), receiving report copy of purchase order, or copy of purchase order if billing is a request for partial payment, and completed Supplemental Input Form (Form 3-2127) if applicable.
B. Construction Contracts. Construction contract payments are due 14 days after receipt of the payment request by the designated billing office (FAR 52.232.27). In order to make payment in compliance with the prescribed timeframe, all construction contract billings will be sent under separate cover to the Finance Center for payment. The billings will be clearly marked "14 day construction contract," and sent to the attention of "Chief, Vendor Payments Section."
C. Partial Payments. In case of a billing for a partial delivery of an order, the invoice and a reproduced copy of the receiving report form of the purchase order, noted as to items delivered, must be sent to the Finance Center for payment. Billings for subsequent deliveries should be cross-referenced to the purchase order.
3.11 Finance Center Procedures. Billings are processed for payment at the Finance Center. This involves examination or audit of the proposed payment, input of the accounting information into the automated accounting system (FFS), and certification of payment by an Authorized Certifying Officer if required by the Statistical Sampling Plan. The payment information is electronically transmitted to The Department of Treasury for issuance.
A. Billings Returned to Field Stations. It may be necessary at times for the Finance Center to return billings to field offices for correction or additional information with a form or memorandum explaining what is needed. The office manager should be careful to see that the necessary corrections are made or the additional information is provided before the billing is resubmitted. A copy of the form or memorandum should be returned with the corrected submission. If the billing is restated or cancelled it should be marked "cancelled" and returned with the new billing or with an explanation of why another billing is not being submitted. Field offices should keep a record of billings returned for correction and the reason types to ensure that subsequent billings may be processed without making the same errors. The billing returns create unnecessary work for all concerned and should be minimized.
B. Disallowances. When it is necessary for the Finance Center to make a deduction from the amount claimed by the vendor other than for a time discount, a notice of disallowance or a letter will be forwarded to the vendor explaining the nature of the deduction, with a copy furnished to the field office. Vendors may reclaim the disallowed amount if the denied amount can be justified. A reclaim may be requested by submitting supporting documentation with the notice or letter and an explanation of the basis for the reclaim.
C. Information Furnished to Vendors. The following information will be furnished to the vendors.
(1) Check Identification Data. The check will include payment information such as the invoice number, account number, etc., and the date of the referenced billing document. If the vendor does not provide this information, the contract number, purchase order number, or issuing field office name will be used. In instances where payment is for numerous invoices, (BPAs, freight bills, etc.), an enclosure card containing the payment information will accompany the check.
(2) Notice of Interest Penalty. In the event of Prompt Payment Interest Payments, the payment will be accompanied by:
(a) Notice of the amount of interest penalty included;
(b) The rate used to compute the penalty; and,
(c) Number of days used to compute the penalty.
D. Information not Furnished to Vendors. When a discount is taken in accordance with the terms offered by the vendor, or agreed upon with the acceptance of a Government purchase order, contract, etc., a separate notice of the deduction will not be furnished as the taking of the discount will be obvious from the amount of the payment.
3.12 References and Forms. References and forms listed in this
chapter are available in Service finance offices.