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FEDERAL RESERVE BANK OF NEW YORK September 30,1983 Federal Agency Vendor Payments Through Fed wire To A l l D e p o s ito r y I n s titu tio n s in the S eco n d F e d e r a l R eserve D is tr ic t: Printed on the reverse side is the text of the notice issued by the Bureau of Government Financial Operations of the Department of the Treasury. The Treasury has requested Reserve Banks to provide depository institutions with a notice announcing the adoption of new procedures that will require most Federal agencies to make payments of $25,000 or more to vendors through the Treasury’s link to Fedwire. In order to receive payments through our Fedwire facilities, vendors will have to obtain certain information from financial institutions that have access to Fedwire, such as the institution’s 9-digit ABA routing number, the telegraphic abbreviation used by the institution, and the account number to which the payment of funds should be credited. Additional information will also be required from financial institutions that receive funds through a correspondent bank. If you have questions regarding the new payments program, you may contact the Treasury Department (as indicated on the reverse side), or call Robert W. Dabbs, Manager, Electronic Payments Department (Tel. No. 212-791-8475). A n t h o n y M. S olomon , President. (Over) Large Federal Vendor Payments Will be Made by E lectro n ic Funds Transfer Treasury’s Bureau of Government F inancial Operations (BGK)) w ill require most Federal agencies to make vendor payments $25,000 or g reater through Treasury’s lin k to Fedvire - the Treasury F inancial Communications System (TFCS) - beginning October 1, 1963- BGFO, responsible fo r disbursing most Federal payments and managing Federal monies, estim ates c iv ilia n agencies alone account fo r the disbursement of over $20 b illio n of such larg e d o lla r vendor payments annually. The move to electro n ic funds tra n s fe r is expected to improve both the tim ing and control of Federal vendor payments. Companies w ill re a liz e several b e n e fits from the Government's use of the TFCS to make vendor payments. F ir s t, since the TFCS has the c a p a b ility to make payment cn exact due date, vendors w ill receive payments in a more tim ely manner. Second, payments can be made d ire c tly to the vendor ls account a t a fin a n c ia l in s titu tio n , elim inating th e u n certain ty and time associated w ith p o sta l d elivery and check processing. Third, since vendors w ill be confident th a t payments w ill be in a more timely manner, they w ill be in a b e tte r p o sitio n to fo re cast cash flow s. Other inform ation such as invoice and co n tract number needed to id e n tify payments w ill s t i l l be fUmished in the actu al payment message provided to the vendor’s fin a n c ia l in s titu tio n . Federal agencies w ill be required to obtain key fin a n c ia l in s titu tio n data from vendors to make payments by TFCS. Financial in s titu tio n s th a t have access to Fedwire w ill be asked to supply th is information to vendors: F inancial in s titu tio n 9-3i g i t ABA routing number. Telegraphic abbreviation of fin a n c ia l in s titu tio n . Account number to which funds should be cred ited . F inancial in s titu tio n s th a t receive funds through a correspondent bank w ill be asked to supply the above and th is information to vendors: Name of the correspondent fin a n c ia l in s titu tio n through which the bank receives messages. Address of correspondent fin a n c ia l in s titu tio n . * Correspondent fin a n c ia l in s t itu ti o n 's 9 -d ig it ABA routing number. For ad d itio n al information ebout the Treasury program, contact the Timely B ill Payment P ro ject Team, Treasury Department, Bureau o f Government F inancial O perations, Treasury Annex #1, ?B 704, Washington, DC 20226. The telephone number i s (202) 634-5770.
@FedFRASER