39 OBD 2110.19 -- Lock Box Procedures for Direct Deposit of Cash Collections

DEPARTMENT OF JUSTICE

ORDER

OBD 2110.19

June 23, 1986

1. PURPOSE. This order prescribes the lock box procedures for the direct deposit of civil collections (judgments-and prejudgments). Establishment of these procedures will accelerate the deposit of funds into the account of the United States Treasury thereby complying with cash management policies set forth by the Department of the Treasury (Treasury) and the Office of Management and Budget (OMB). In addition, these procedures enhance the internal control of cash from receipt to deposit.

2. SCOPE. This order applies to the collection offices in the legal divisions and the United States Attorneys' offices. For purposes of this order legal divisions are the Tax Division, Civil Division, Land and Natural Resources Division, Civil Rights Division, Criminal Division, and Antitrust Division.

3. POLICY.
   1. Collection Office Procedures. All payments of civil debts received by the U.S. Department of Justice (DOJ) collection offices (see paragraph 4b for a definition of collection office) will be mailed by the collection office DAILY to The Citizens and Southern National Bank (C&S) of Atlanta, Georgia, a designate depository. Checks for civil judgments and civil prejudgments will no longer be forwarded to referring Government agencies or the Financial Operations Service, Finance Staff, Justice Management Division, for deposit. All checks received from debtors will be accepted SUBJECT TO COLLECTION. Unless expressly requested by a debtor, his agent, or attorney, receipts will not be issued for payments received by check or money order. Copies of payment receipts will not be forwarded to the referring agency. All other current office procedures will remain in effect.

   2. Payments Received by Collection Offices. All payments received by DOJ collection offices must be mailed for deposit daily to C&S. The bank will, on the day of receipt of the deposit, transfer the funds to the Treasury in Washington, DC by electronic funds transfer (EFT), thereby crediting a DOJ clearing account. At the same time C&S will, by electronic data link, notify the Debt Management Section (DMS) of the Financial Operations Service of the deposit. Notification by C&S will contain individual debtor information, exceptions or discrepancies in deposit information, and returned check data.

   3. Funds Credited to Clearing Account. Funds credited to a DOJ clearing account will be transferred by DMS to the referring agency using standard Treasury procedures. With the transfer of funds, each referring agency will receive a report which will identify each debtor's name, the date mailed to C&S (interest computation date), agency file number, amount collected, cause of action or agency program code, and the name and telephone number of the DOJ collection office. Each agency can use this information to apply the cash collections as best suits their internal procedures.

   4. Costs Included in a Payment with Principal.
      1. Each collection office shall advise the referring agency of the amount of costs in the judgment transmittal. The judgment transmittal should show the detail amounts for principal, interest, court costs, and U.S. Marshal costs, as well as specifying the applicable interest rate. Additional notifications SHALL NOT be sent to the referring agencies after the initial advice unless circumstances of the original judgment change. The referring agency should be specifically directed to credit payments according to 28 U.S.C. 1961 and the U.S. Rule, and to deposit costs to a Miscellaneous Receipt account.

      2. Form OBD-230, Deposit Slip, will be prepared for the amount collected, with no breakdown for court or U.S. Marshal costs. Payments will be split only when they are distributed to two or more different locations within one agency (i.e., a consolidated VA debt with a portion going to the Centralized Accounts Receivable System in St. Paul and a portion to a VA regional office), or to two or more separate referring agencies, as shown in appendix 1, item number 2.

   5. Money Judgment for Costs Only. Where a money judgment is for costs only, the imposition and receipt of funds is to be processed using the referring agency code, with a cause of action code of CSTS. The DMS computer system will automatically convert the referring agency code on all CSTS cause of action codes so that the costs will be directed to the DOJ where the costs will be reported in the appropriate miscellaneous receipt account.

   6. Notification of Payments. Notification to the referring agencies of individual payments received will be made by the DMS. Referring agencies SHOULD NOT be sent a separate advice of individual payments received.

   7. Bequests to the United States. Funds received as a result of a bequest to the United States in a will are processed as are state court tax liens, 28 U.S.C. 2410. However, report all bequests with an agency code of JUST and a cause of action code of OPB.

4. DEFINITIONS.
   1. Payments. Checks or money orders. Currency, coin or negotiable instruments such as bonds must be converted to a check or money order prior to deposit.

   2. Collection Office. A U.S. Attorney's office or legal division in the Department which collects civil payments.

5. CONVERSION TO A MONEY ORDER.
   1. All debtors should be requested to make payments by check or money order. If a debtor pays in currency or coin, payment MUST be accepted and immediately converted to a money order, preferably a U.S. Postal Service money order, made payable to the Department of Justice.

   2. To convert currency or coin to a money order, the collection office shall purchase a money order and charge the costs to administrative expense. The money order will then be deposited in accordance with these procedures.

6. CHECK OR MONEY ORDER INSPECTION.
   1. Each debtor is to be advised to make all checks or money orders payable to the U.S. Department of Justice. Nevertheless, checks received payable to the Treasury or another Government agency WILL be accepted and deposited according to the procedures in this order.

   2. Each debtor is to be advised to place the U.S. Attorney or legal division claim number on the face of the check or money order in the lower left corner. If the claim number is not on the check or money order when received, the individual preparing the deposit slip will be responsible for placing the claim number on the check or money order.

7. DEPOSIT SLIP PREPARATION. Each collection office will use Form OBD-230, Deposit Slip, as shown in appendix 1. Deposit slips and self-addressed envelopes will be mailed to each office by DMS on an annual basis.
   1. Sequential Number. The deposit number for each deposit slip requires a sequential number issued by the collection office. See the deposit slip instructions in appendix 1. This number will only be used once in a fiscal year by each collection office.

      One consolidated deposit will be made daily to C&S for all collections received. No currency, coin or negotiable instruments, other than checks or money orders, may be deposited. Such other items must be converted to a money order. Checks or money orders received before 3 p.m. local time MUST be deposited on the day of receipt. Checks or money orders received after 3 p.m. local time shall be deposited the next business day. Sufficient information shall be retained from the deposited checks or money orders so that the debtor record may be updated as soon as possible in accordance with applicable procedures for the system in use at the collection office.

   2. Collection Offices That Have Automated Capabilities. A collection activity that has automated capabilities (i.e., PROMIS, other division computer systems, or word processing equipment) may produce the deposit slip shown in appendix 1, from their automated system. All elements shown on the deposit slip MUST be incorporated into the automated version and MUST be in the same sequence.

   3. Preparer Must Sign and Date the Deposit Slip. Prior to making a deposit, the preparer of the deposit slip must sign and date the slip as shown in appendix 1. This acknowledges that:
      1. The deposit number is the next in sequence.

         The DATE MAILED is correct.

      2. All deposit information is correct.

      3. Checks or money orders are properly filled in and signed by the payor.

      4. The claim number is on the face of each check or money order in the lower left corner.

      5. The checks or money orders are properly endorsed.

   4. The Deposit Slip Must be Countersigned and Verified. Prior to making a deposit the verifier must sign and date the slip as shown in appendix 1 This acknowledges that:
      1. An independently prepared adding machine tape has been made which contains each check or money order amount.

      2. The total of the tape agrees with the total of the deposit.

      3. The number of checks or money orders agrees with the item count on the deposit slip.

8. ENDORSEMENT. Each check/money order must be endorsed on the back. The sample endorsement shown below shows the format and items required in each endorsement.

   For Deposit Only To
   U.S. Department of Justice
   009-24-449/15030001
   U.S. Attorney
   California - Southern
   5-N-19 U.S. Courthouse
   940 Front St.
   San Diego, CA 92189

   Deposit # CAS__________

   The preceding sample endorsement is for the Southern District of California. The underlined portion of the deposit number will be filled in by the collection off ice with the last digit of the fiscal year and the three digit sequential number. The deposit number on each check or money order must be the same as the deposit slip. See appendix 2 for your collection office code which must always precede the underlined deposit number.

   NOTE: The only items within the endorsement that cannot be included in a regular hand stamp are the items within the underlined portion of the Deposit #. If your office is equipped with a rubber stamp with automatic numbering capabilities, make certain that the sequential portion of the deposit number remains the same for all checks or money orders in the deposit. If your automatic stamp has the capability of inserting sequential item numbers, make certain that the item number for each check or money order is in the same sequence as the item number on the deposit slip.

   EXCEPTIONS OR DISCREPANCIES IN DEPOSIT SLIPS. C&S will notify DMS daily by electronic data link of any exceptions or discrepancies noted during the bank reconciliation. The bank may, after reconciling the checks to the deposit slip, correct the deposit amount in accordance with the actual amount of the checks. The corrected amount will be used-in the daily transmission. DMS will then notify the collection office telephonically of the exception/discrepancy. The collection office will be required to correct individual debtor records to reflect the corrected amount when discrepancies occur. However, photostats of all checks in question can be obtained from the bank upon request by DMS and the corrected amount will be subject to confirmation by the originating collection office as soon as possible after the bank correction has been made. DMS will notify C&S of any errors in C&S's reconciliations. Bank errors will be corrected by C&S and reported in the next transmission to DMS.

   MONTHLY STATEMENT. C&S will submit a monthly listing by collection office of all deposits received, all discrepancies and exceptions, and all returned checks. This listing will be sent to DMS, by electronic data link, and mailed by DMS to EACH collection office. The monthly statement MUST be reconciled to the daily deposits for the month by each collection office. Deposits not listed or in error should be brought to the attention of DMS immediately. DMS will notify C&S of any errors in C&S's reconciliation. See appendix 5 for an example of the monthly statement.

   RETURNED CHECKS. If a check is returned, C&S will charge the DOJ account in Treasury and notify DMS by the electronic data link. Sufficient identification data will be provided to permit DMS to correct agency accounts and notify the collection office of the returned check. In addition, C&S will forward the returned check to DMS. Upon receipt DMS will forward the returned check to the collection office, where the debtor record must be updated. Checks returned to the collection office WILL NOT be resubmitted for deposit. A new check or a money order must be obtained and deposited.

   DEPOSITS OF GREATER THAN OR EQUAL TO $50,000.00. A collection office expecting an exceptionally large payment, encountering an unusual situation or having any questions regarding this order should contact:

   Department of Justice
   JMD/Debt Management Section
   P.O. Box 177
   Ben Franklin Station
   Washington, DC 20044
   ITS 272-6323

   AUTHORITY. This order is issued under the authority of 28 C.F.R. Section 0.76(a).

W. LAWRENCE WALLACE
Assistant Attorney General for Administration