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Strategic PlanStrategic PlanThe Department of the Treasury

For the fiscal years 2003 – 2008

Department of the Treasuryii

The cover photograph shows the Main Treasury Building, which houses theoffices of the United States Department of the Treasury. This magnificentbuilding at 1500 Pennsylvania Avenue, located next to the White House,serves as a symbol of the themes for this strategic plan: prosperity, stabilityand integrity.

The Treasury Building is the oldest departmental building in Washington. It isthe third oldest federally occupied building in Washington, preceded only bythe Capitol and the White House. The Main Treasury Building had a greatimpact on the design of other government buildings. At the time of itscompletion, it was one of the largest office buildings in the world. It is amonument of continuing architectural and historical significance. TheTreasury Building was dedicated as a National Historic Landmark onOctober 18, 1972.

The Main Treasury Building was built in phases, reflecting the increasing sizeand importance of Treasury and changing national needs. The originalbuilding consisted of the east and center wings. The building was designedby architect Robert Mills, the architect of the Washington Monument, andwas completed in 1842. The south wing expanded the building and incorpo-rated new technology to improve the structure and increase the security ofthe vaults that held the Federal wealth. The original design was provided byThomas Ustick Walters, the architect of the dome of the U.S. Capitol, andwas refined during construction by Ammi B. Young and Isaiah Rogers.Architect Alfred B. Mullett, who subsequently designed the State Depart-ment Building and the building now known as the Dwight D. EisenhowerExecutive Office Building, designed the north wing.

The north wing was completed in 1869, and contains the Cash Room,which was used for the inaugural ball for President Grant’s first inaugurationon March 4, 1869. This grand but functional room housed the daily financialtransactions of the U.S. Government, and still embodies the dignity andtradition with which the Department of the Treasury serves the Nation.

The Main Treasury Building provides a visual image of Treasury’s contributionto the stability and prosperity of the Nation since Treasury’s beginnings in1789. The majesty of the building serves as an icon to represent the truewealth that it has contained and will continue to contain in the years tocome the men and women who have served and continue to serve theDepartment of the Treasury since its creation in 1789. These men andwomen have a long history of meeting the changing needs of the Nation,promoting the Nation’s economic prosperity and serving as the stewards ofits economic and financial systems.

The Cash Room

Strategic Plan • Fiscal Years 2003-2008 iii

MESSAGE FROM THE SECRETARY

The Department of the Treasury has a long tradition of stewarding theUnited States economic and financial system. As we have promotedgrowth and prosperity through our Nation’s history, Treasury has evolvedto meet the Nation’s changing needs.

This Strategic Plan aims to continue that tradition. It will serve as a guidefor modernizing Treasury’s capabilities, preserving our standards forexcellence while adapting our operations to the challenges of a newcentury.

One historic change at Treasury in the past year has been the divestiture ofmost of the Department’s law enforcement divisions. The governmentreorganization creating the Department of Homeland Security also createdan opportunity to focus the Department of the Treasury on its coreeconomic and financial policy missions.

The Treasury Strategic Plan seizes this historic moment, highlighting Treasury’s three main goals: promot-ing national prosperity through economic growth and job creation; maintaining public trust and confi-dence in our economic and financial systems; and ensuring the Treasury organization has the workforce,technology, and business practices to meet the Nation’s needs effectively and efficiently.

By following this plan, I believe we can achieve those goals, and provide outstanding service and valueto the President, Congress, and the American public. The Department of the Treasury is committed tothese results.

John W. SnowSecretary of the Treasury

John W. Snow

Department of the Treasuryiv

Strategic Plan • Fiscal Years 2003-2008 v

TABLE OF CONTENTS

MESSAGE FROM THE SECRETARY ................................................................................. iii

TABLE OF CONTENTS ................................................................................................. v

MISSION AND ORGANIZATION ..................................................................................... 1

THE ECONOMIC AND FINANCIAL FOCUS ...................................................................... 2

THE ORGANIZATION OF THE DEPARTMENT OF THE TREASURY ....................................... 4

THE TREASURY STRATEGIC MANAGEMENT SYSTEM ....................................................... 6

THE TREASURY STRATEGIC GOALS AND STRATEGIC OBJECTIVES ..................................... 8

Strategic Goal E1- Promote Prosperous U.S. and World Economies .................. 9

Strategic Goal E2- Promote Stable U.S. and World Economies ....................... 14

Strategic Goal F3- Preserve the Integrity of Financial Systems ......................... 19

Strategic Goal F4- Manage the U.S. Government’s Finances Effectively .......... 25

Strategic Goal M5-Ensure Professionalism, Excellence, Integrity, andAccountability in the Management and Conduct of theDepartment of Treasury ..................................................... 30

APPENDICES

A. CROSSWALK OF TREASURY STRATEGIC GOALS, STRATEGIC OBJECTIVES,AND BUREAU GOALS..................................................................................... A1

B. EXECUTIVE SUMMARIES OF BUREAU PLANS ..................................................... B1

C. TABLE OF CROSS-CUTTING ISSUES AND LINKAGES TO PARTNERS ..................... C1

D. PROGRAM EVALUATIONS .............................................................................. D1

E. GLOSSARY OF TERMS AND ACRONYMS ............................................................ E1

Strategic Plan • Fiscal Years 2003-2008 1

Mission and Organization

The mission of the Department of the Treasury is to promote theconditions for prosperity and stability in the United States andencourage prosperity and stability in the rest of the world.This mission statement highlights Treasury’s role as the steward of U.S. economic and financial systems,and as an influential participant in the international economy. Treasury’s commitment to our citizens isto create economic and employment opportunities for all by raising the rate of sustainable growth. Tothe extent this objective is linked to world economy, Treasury will seek to influence global financial andeconomic issues whenever possible to promote global economic growth and stability.

The Department of the Treasury is the primary federal agency responsible for the economic and financialprosperity and security of the United States, and as such is responsible for a wide range of activitiesincluding advising the President on economic and financial issues, promoting the President’s growthagenda, and enhancing corporate governance in financial institutions.

In the international arena, the Department of the Treasury works with other federal agencies, the govern-ments of other nations, and the International Financial Institutions (IFIs) to encourage economic growth,raise standards of living, and predict and prevent, to the extent possible, economic and financial crises.

Department of the Treasury2

The Economic and Financial FocusThe Treasury mission focuses on two interrelatedareas: economics and finance. Creating theconditions for prosperity requires U.S. andinternational economic and financial systems thatoperate at full potential, maintain stable andsecure foundations for growth, and preserve theintegrity of systems and operations. As managersof the Federal Government financial systems, theTreasury must efficiently and effectively provideaccountability for federal funds and ensure thebest value is gained from available resources.

The Economic Focus

The Secretary of the Treasuryis the principal economicadvisor to the President. TheSecretary plays a critical rolein policy making by bringingeconomic and governmentfinancial policy perspectiveto issues facing the govern-ment. Treasury has both apolicy and operational rolein promoting prosperousU.S. and world economies,raising standards of living,and protecting this prosper-ity through secure and stabledomestic and internationaleconomic and financialsystems.

The Department of theTreasury serves as an advisorto the President on measures to promote domesticeconomic growth and prosperity, and on methodsfor executing the Treasury elements of thePresident’s economic agenda. These elementsinclude, but are not limited to, increasing coordi-nation between economic and military/politicalissues; administering the Jobs and Growth TaxRelief Reconciliation Act of 2003; improving theFair Credit Reporting Act; increasing economicgrowth, as measured by improvements in produc-tivity and higher income per capita; and improv-ing economic stability, as measured by a reductionin the severity, length, and frequency of economic

downturns and crises.

Treasury develops policies and provides guidanceaffecting fiscal matters, financial institutions,financial regulation, and capital markets. Treasuryis responsible for the safety and soundness ofnational banks, federally-chartered savingsassociations, and federally-chartered savingsbanks. Treasury provides focused assistance topromote economic growth and raise the standardof living in distressed communities by increasingthe availability of business capital and financialservices. Treasury also produces the coins andcurrency needed by the Nation, and guards

against counterfeiting andother misuse of our money.

In the international arena, theDepartment of the Treasury isthe principal federal agencyresponsible for developingpolicies and guidance in theareas of international monetaryand financial affairs, trade infinancial services, Customsrevenue functions, foreigndirect investment in the UnitedStates, international debtstrategy, and U.S. participationin international financialinstitutions. In addition,Treasury is a principal agencyfor developing policies in theareas of trade in goods andnon-financial services and

foreign investments abroad.

On these and other issues of international financeand economics, Treasury partners with theDepartment of State, the Federal Reserve System,the Office of the U.S. Trade Representative, theExport-Import Bank, the Overseas Private Invest-ment Corporation, the Commerce Department,and other Executive Branch offices and councils.Treasury also works closely with the internationalfinancial institutions, such as the World Bank andthe International Monetary Fund (IMF).


The Financial Focus

The Department of the Treasury is the principalfiscal agent for the Federal Government, manag-ing the Nation’s finances by collecting money duethe United States, making its payments, managingits borrowing, and performing central accountingfunctions. The Treasury administers the financialsystem in a way that promotes its use for legiti-mate purposes, and prevents the system frombeing used for purposes that support criminalactivity. Treasury’s role in executing the Nation’sfinancial sanctions policies and countering moneylaundering and other financial crimes, such asterrorist financing, has become increasinglyimportant in recent years.

The Department of the Treasury is the primaryfederal agency responsible for collecting taxes and

revenue on regulated commodities. The Depart-ment of the Treasury oversees, accounts for, andreports on government collections and expendi-tures and is responsible for collecting delinquentfederal debt government-wide.

Treasury also determines and executes the strategyto borrow what is necessary to meet the monetaryneeds of the Federal Government at the lowestpossible cost over time. In achieving these finan-cial goals, Treasury ensures liaison and coordina-tion with other agencies on cross-cutting activi-ties. These include almost all federal programagencies for payments, collections, and debtcollection activities, and the Federal ReserveSystem for payments, collections, and operationalaspects of the distribution and redemption ofgovernment securities.

Management Focus and Operations

Treasury will achieve its strategic goals by building a strong institution, which is citizen-centered, results-oriented, and actively promotes innovation through competition. We will work effectively and effi-ciently to implement the President’s Management Agenda across all Treasury bureaus and continuouslyimprove our internal business operations. Treasury bureaus support these goals through their internalmanagement goals as articulated in their individual bureau strategic plans.


The Organization of theDepartment of the Treasury

The Department of the Treasury is organized into two major components,the Departmental Offices and the Bureaus. The Departmental Offices (DO)are primarily responsible for policy formulation, while the bureaus are prima-rily operating organizations that execute many of the Treasury’s goals. Themajority of Treasury’s workforce and resources are focused in its operating bureaus. DO is composed ofdivisions headed by Assistant Secretaries, some of whom report to Under Secretaries, with primaryresponsibility for policy formulation and overall management of the Treasury Department.

Domestic Finance develops policies and economic guidance which help create the conditions forprosperity at home through advice and assistance in domestic finance, banking, financial institutions,federal debt finance, financial regulation, and capital markets.

The Office of Economic Policy is responsible for analyzing and reporting on current and prospectiveeconomic developments in the U.S. and world economies and assisting in the determination of appropri-ate economic policies. Economic Policy’s global economic policies strongly influence the conditions forprosperity abroad.

The Executive Office of Terrorist Financing and Financial Crime (EOTFFC) develops and imple-ments U.S. Government strategies to combat terrorist financing domestically and internationally,develops and implements the National Money Laundering Strategy as well as other policies and programsto fight financial crimes. EOTFFC implements strategies to administer and enforce economic and tradesanctions based on U.S. foreign policy and national security goals through the Office of Foreign AssetsControl (OFAC) and administers the Treasury Forfeiture Fund through the Executive Office for AssetForfeiture (EOAF). OFAC enforces economic and trade sanctions based on U.S. foreign policy andnational security goals. OFAC implements sanctions programs against targeted foreign countries,terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation ofweapons of mass destruction. The Financial Crimes Enforcement Network (FinCEN), OFAC andEOAF report to EOTFFC.

The Office of International Affairs advises and assists in the formulation and execution of U.S. interna-tional economic and financial policy, including the development of policies for international financial,economic, monetary, trade, investment, bilateral aid, environment, debt, development, and energyprograms. International Affairs develops policy for the U.S. participation in international financialinstitutions.

Tax Policy develops and implements tax policies and programs; reviews regulations and rulings toadminister the Internal Revenue Code; negotiates tax treaties; and provides economic and legal policyanalysis for domestic and international tax policy decisions. Tax Policy also provides estimates for thePresident’s budget, fiscal policy decisions, and cash management decisions.

Internally, DO is responsible for overall management of the Department. Offices responsible for theinternal management and controls include General Counsel, the Assistant Secretary for Managementand Chief Financial Officer, Public Affairs, and the Treasurer of the United States. Also, inspectorgeneral functions provide independent audits, investigations, and oversight to the Department of theTreasury and its programs.

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Treasury Bureaus carry out the operational facets of Treasury’s business.

The Alcohol and Tobacco Tax and Trade Bureau (TTB) enforces and administer laws on the produc-tion, use, and distribution of alcohol and tobacco products. TTB also collects excise taxes for firearmsand ammunition.

The Bureau of Engraving and Printing (BEP) designs and manufactures U.S. currency, many stamps,securities, and other official certificates and awards.

The Bureau of the Public Debt (BPD) borrows the money needed to operate the Federal Governmentand accounts for the Public Debt. It administers the Public Debt by issuing and servicing U.S. Treasurymarketable, savings, and special purpose securities.

The Community Development Financial Institutions (CDFI) Fund expands the capacity of financialinstitutions to provide credit, capital, and financial services to underserved populations and communitiesin the United States. (CDFI is not a bureau but has special program emphasis.)

The Financial Crimes Enforcement Network (FinCEN) collects, analyzes and shares informationneeded to combat the financial aspects of criminal activity worldwide.

The Financial Management Service (FMS) provides central payment services to federal programagencies, operates the Federal Government’s collections and deposit systems, provides government-wideaccounting and reporting services, and manages the collection of delinquent debt.

The Internal Revenue Service (IRS) is the largest of Treasury’s bureaus. It determines, assesses, andcollects internal revenue in the United States.

The U.S. Mint (MINT) designs and manufactures domestic, numismatic, and bullion coins as well ascommemorative medals and other numismatic items. The Mint distributes U.S. coins to the FederalReserve Banks and maintains physical custody and protection of our nation’s silver and gold assets.

The Office of the Comptroller of the Currency (OCC) charters, regulates, and supervises nationalbanks to ensure a safe, sound, and competitive banking system that supports the citizens, communities,and economy of the United States.

The Office of Thrift Supervision (OTS) charters, examines, and regulates federal thrifts to maintaintheir safety and soundness. OTS also regulates state-chartered savings associations belonging to theSavings Association Insurance Fund and savings association affiliates and holding companies.


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Strategic Plan BudgetAnnual

Performance Plan

objectives. We realigned our internal managementgoals to provide a strong platform on which toaddress the five areas of the President’s Manage-ment Agenda and create the environment forcontinuous improvement.

Through these efforts we have produced a five-year plan that is outcome oriented; incorporatesessential management practices such as perfor-mance measurement and accountability; fostershuman capital strategies that support agencyobjectives and mission accomplishment; furthersthe integration of budget and performance; andcommunicates to a broad and varied audience ourgoals and objectives and the initiatives we haveunderway to achieve them.

Strategic Plan Supports the StrategicManagement System

As shown in the diagram below, our Strategic Planprovides the foundation for the Treasury StrategicManagement System, which links the TreasuryStrategic Plan, bureau strategic plans, AnnualPerformance Plans, the budget submission, andperformance management and reporting. We usethe Strategic Management System to furtherintegrate budget and performance.

The Treasury Strategic Management System

Strategic Plan as a CommunicationDevice and Management Tool

The Treasury Strategic Plan serves two importantpurposes: it communicates Treasury’s goals andobjectives to Treasury employees, customers, andstakeholders; and it is a management tool toincorporate performance and accountability intothe budget process. The President’s ManagementAgenda provides the framework for tighteningthe relationship between budgeting and programeffectiveness. We established a meaningful set ofoutcome oriented performance measures and willuse them to improve the management ofTreasury’s business lines, make further progresstoward world-class performance, and continue tocreate value for the American people.

Building our Strategic Plan for FY2003-2008 hasgiven us an opportunity to refocus and redefineour core financial and economic missions. Inparticular, we defined and established ourescalating role in stopping terrorism by disman-tling terrorists’ financial infrastructure. Treasuryalso conducted an extensive review of its currentstrategic goals and objectives, updating, revising,adding, and eliminating as needed. Departmen-tal and bureau leadership have brought theirgoals, objectives and measures into alignmentwith the Treasury Mission, strategic goals and


Linkage to BureauStrategic Plans

The Treasury Strategic Plan incorporates bureaugeneral goals that directly support Treasurystrategic objectives. Bureaus articulate in theirown strategic plans the full set of goals, initiatives,and performance measures used to achieve theirown strategic and general goals, as well as the goalsreported in the Treasury plan. DO maintainsinternal goals and objectives to focus and guidetheir operations.

This Strategic Plan articulates the mission, strate-gic goals, and strategic objectives of the TreasuryDepartment as a whole. It also includes the highlevel means and strategies by which the Treasuryand its bureaus achieve the Treasury strategicobjectives. Means and strategies describe actions tobe taken to achieve stated goals. The bureaugeneral goals in the Strategic Plan provide theframework for, and are included in, the AnnualPerformance Plan. In the Annual PerformancePlan according to OMB Circular A-11, thebureaus and Departmental Offices establishspecific, measurable, annual performance goals.We establish performance measures to explicitlygauge the level of success against the performancegoals. By defining the performance goals andmeasures in an objective and quantifiable manneror as precise descriptive statements, we have anaccurate, independent determination of actualperformance.

Performance Measures and the BudgetProcess

Treasury uses the Program Assessment Rating Tool(PART), in conjunction with internal controls, as abridge between program performance measuresand the budget request. We will apply the PART,over five years, to all Treasury programs, bringingfunding levels and program performance intobetter alignment throughout the Department. Thelinkage of performance and budgeting also has abeneficial impact on the ongoing management ofthe Treasury’s programs. Managers use the internalPerformance Reporting System (PRS) to continu-ously assess progress in achieving desired out-

comes, and adjust actions accordingly. Implement-ing the Treasury Strategic Management Systemultimately impacts the dollars that programsreceive and encourages effective ongoing manage-ment. This Strategic Plan, as the foundation forbureau goals and measures provides the frameworkfor the system. Using data provided through thePRS, keeping an eye on the results achieved, andusing the Strategic Plan as our decision-makingtool, Treasury, its customers and stakeholders,become the true beneficiaries of our StrategicManagement System.

Definition of Terms:

Mission describes why Treasury exists.

Strategic Goals represent overarching statementsof aim or purpose used to group the strategicobjectives.

Strategic Objectives define how the Departmentof the Treasury will carry out its mission over thestrategic planning period of Fiscal Years 2003 to2008. The Strategic Objectives demonstrate thecomplex and varied approaches needed to achievethe strategic goals.

Means and Strategies describe how Treasury andits operating bureaus and programs will achievetheir strategic objectives. These means and strate-gies cover the major functions and operations, butomit support-type operations and activities.

Bureau General Goals are linked to Treasurystrategic objectives, and the bureau PerformancePlans. The bureau general goals describe how thebureaus will carry out their missions during thestrategic planning period.

Partners are outside entities that contribute to,influence, and/or regulate activities.

Key Factors articulate challenges to achievingdesired goals as well as elements that contribute toour success.


The Treasury Strategic Goals and Strategic Objectives

The Treasury Strategic Plan has five strategic goals. Each strategic goal has supporting strategic objectives.The goals and objectives describe how Treasury will manage and influence the U.S. and internationaleconomic and financial systems so that they operate at their full potential, maintain stable foundationsfor growth, and preserve the integrity of their systems and operations. The fifth goal provides Treasury’scorporate guidance for the internal operation of the Department of the Treasury and gives strategicdirection for achieving the President’s Management Agenda.

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Strategic Goal Strategic Objectives

Promote Prosper- Stimulate economic growth and job creation (E1A)ous U.S. and Provide a flexible legal and regulatory framework (E1B)World Economies Improve and simplify the tax code (E1C)(E1)

Promote Stable Increase citizens’ economic security (E2A)U.S. and World Improve the stability of the international financial system (E2B)Economies (E2)

Preserve the Disrupt and dismantle financial infrastructure of terrorists,Integrity of drug traffickers, and other criminals and isolate their support networks (F3A)Financial Systems Execute the Nation’s financial sanctions policies (F3B)(F3) Increase the reliability of the U.S. financial system (F3C)

Manage the U.S. Collect federal tax revenue when due through a fair and uniform application of the law (F4A)Government’s Manage federal debt effectively and efficiently (F4B)Finances Make collections and payments on time and accurately, optimizing use of electronic mechanisms (F4C)Effectively (F4) Optimize cash management and effectively administer the Government’s financial systems (F4D)

Ensure Protect the integrity of the Department of the Treasury (M5A)Professionalism, Manage Treasury resources effectively to accomplish the mission and provide quality customerExcellence, service (M5B)Integrity, andAccountability inthe Managementand Conduct ofthe Departmentof the Treasury(M5)


Strategic Goal E1- Promote Prosperous U.S. andWorld EconomiesThe aim of this Strategic Goal is to ensure that theUnited States and World economies perform at fulleconomic potential. In order to perform at its fullpotential, the U.S. economy must increase its rateof growth and create new, high quality jobs for allAmericans. Additionally, the legal and regulatoryframework must support this growth by providingan environment where businesses and individualscan grow and prosper without being limited byunnecessary or obsolete rules and regulations.

Treasury plays diverse roles as to the domesticeconomy. From serving as the President’s principaleconomic advisor to issuing tax refunds to millionsof Americans, the Treasury has a significantinfluence on creating the conditions for economicprosperity in the U.S.

A prosperous world economy serves the UnitedStates in many ways. It creates markets for U.S.goods and services, and it promotes stability andcooperation among nations. For these reasons, theDepartment of theTreasury will workwith other federalagencies and officesto promote interna-tional economicgrowth and raiseinternationalstandards of livingthrough interactionwith foreign govern-ments and interna-tional financialinstitutions.

Key Partners in Achieving this Goal:

On domestic economic affairs Treasury worksprimarily with the Departments of Agriculture,Commerce, Housing and Urban Development,Interior, Health and Human Services, Transporta-tion, Veterans Affairs, the Small Business Adminis-tration, the Social Security Administration, theFederal Reserve Board, the Federal DepositInsurance Corporation, the National Credit UnionAdministration (NCUA), the Securities andExchange Commission, the Federal FinancialInstitutions Examination Council (FFIEC), StateTax Agencies, the U.S. Postal Service, the PensionBenefit Guaranty Corporation, the CommodityFutures Trading Commission, the White House,Congress, and various advisory committees.

On global economic issues Treasury’s key partnersinclude the Department of State, the FederalReserve System, the Export-Import Bank, theOverseas Private Investment Corporation, the

Office of the U.S.Trade Representative,the Organization forEconomic Cooperationand Development, theBasel Committee onBanking Supervision,G7 partners, G8partners, G10 partners,G20 partners, theInternational MonetaryFund, the World Bank,and other multilateraldevelopment banks.


Key Factors Affecting Achievementof this Goal:

Treasury’s primary role is to influence and shapeU.S. and global policies to create the conditionsfor growth and improved standards of living.

Domestically, key factors include:

• Multitude of economic influences. Countlessvariables impact domestic and foreign eco-nomic conditions. From consumer confidenceto terrorist acts, a vast array of events andactivities influence the course of the U.S.economy.

• Changes in the financial services industry.Competitive pressures, consolidation offinancial institutions, development of newproducts and services, and other changes inthe market will impact efforts to improve andmodernize the U.S. financial system, andconsequently have an impact on economicperformance.

Globally, key factors include:

• External shocks. Economic and financialcrises are difficult to predict, and the effective-ness of responses to them depends to a signifi-cant extent on the adequacy of policies othercountries adopt and the reaction of financialmarkets. In addition, factors such as naturaldisasters, infectious disease, war, and civilunrest may adversely affect economic perfor-mance.

• Increased globalization and complexity. Therapid increases in the volume of financialtransactions, types of financial instruments,and number of global players challenge theability of the regulatory community to remainas modern as the market in its efforts topromote financial stability.

• U.S. trading partners’ commitment. Thedegree of commitment of major U.S. tradingpartners to strengthen regional and multilat-eral trading initiatives and further opendomestic markets will have an impact on theachievement of our objectives.

• Difficulty of consensus. Failure amongofficials from many different countries to agreeon a flexible approach to economic andregulatory cooperation could delay progress inestablishing new or expanding existing ar-rangements. Moreover, the U.S. must forgeagreement with other member countries in theinternational financial institutions (IFIs) toachieve many of the objectives and strategiesnoted under this goal.

• Predominance of private finance. Privatecapital flows dwarf official sources. Thecapacity of the monetary authorities toinfluence events largely rests on their ability toinfluence financial markets’ expectations.


Strategic Objective E1A: StimulateEconomic Growth and Job Creation

The Department of the Treasury, with otheragencies and organizations, works to stimulateeconomic growth and raise living standards in theUnited States and abroad.

Treasury supports U.S. economic growth bydeveloping and implementing policies for domesticeconomic development, tax programs, bankingand financial institutions, and other fiscal matters.Treasury also pays particular attention to improv-ing the economies of distressed communities. Thecreation of good jobs for Americans is an essentialelement in a balanced economic plan that willaccelerate and sustain our recovery, increaseworkers’ standards of living, and improve theeconomic performance of our Nation now and foryears to come.

Internationally, most of humanity lives in develop-ing and emerging markets with low standards ofliving and little opportunity for economic advance-ment. Reducing this extreme poverty can dramati-cally improve health and welfare worldwide.Furthermore, the U.S. benefits when developingand transitional countries expand their economiesand open their markets. Greater economic oppor-tunity in developing and emerging markets canenhance regional stability, advance democracy,reduce the spread of infectious diseases, andprovide new opportunities for profitable trade.Treasury, through its responsibility for U.S. moneyinvested in the IFIs as well as international eco-nomic policy, plays a role in accelerating growthand improving living standards around the world.

The United States and the world benefit from astrong, integrated international trading system.Opening world markets to increase trade promotesglobal prosperity, and prosperity promotes peace.As we integrate nations and peoples through trade,we invest in the future security of the U.S. and therest of the world. Treasury leads the U.S. efforts toliberalize the financial aspects of the internationaltrading system.

Means and Strategies

Domestically, DO’s highest priority initiative is toimplement the President’s growth agenda. Ongo-ing, long-term initiatives include pressing for taxchanges, encouraging efficient savings and invest-ment, designing policies that improve the effi-ciency and productivity of various sectors of theAmerican economy, and continuing to developforecasting capabilities to project emerging trendsand drive policies.

CDFI promotes job creation by providing financ-ing and technical assistance to financial institu-tions (e.g., community development banks, creditunions, loan funds, microenterprise funds, com-munity development venture capital funds, andbank community development corporations) thatfinance businesses and commercial real estatedevelopment in underserved communities, and taxcredit authority to community developmententities (CDEs) whose investments help create jobsand stimulate economic growth in underservedcommunities.

The CDFI Fund strengthens the capacity of anationwide network of regulated and non-regu-lated financial institutions serving distressedcommunities. The CDFI Fund certifies theseinstitutions, and gives technical and financialassistance to them. By strengthening this segmentof the U.S. financial system, the Fund helps tominimize the potential effects of wide-scaledisruptions in the U.S. financial markets, particu-larly in distressed communities that may not beserved by traditional regulated institutions.

On the international front, DO has two maininitiatives intended to increase economic growthand raise living standards. First, DO implementsU.S. development strategy for the MultilateralDevelopment Banks (MDBs), focusing on improv-ing productivity and social return on investment inMDB lending and grants and specifying andtracking measurable results for all projects. Second,DO advocates for growth in economic bilateralrelationships, especially with under-performingindustrial nations.


Treasury is also part of a task force responsible forsetting up the Millennium Challenge Corporation(MCC) to administer the Millennium ChallengeAccount (MCA). The MCA, a Presidential initia-tive, creates incentives for specific measurableresults, channeling funds to countries that followpro-growth policies. MCA operates on the prin-ciple that aid is more likely to promote economicgrowth and raise living standards in countries thatpursue the sound political, economic, and socialreforms necessary for development to occur.

DO plays a critical role in supporting tradeliberalization, the increase in the free trade offinancial services, and cross border investment.DO works to incorporate provisions for tradeliberalization and financial services liberalizationinto international trade negotiations, including theDoha, Qatar, round and the Free Trade Area of theAmericas (FTAA) , as well as other free tradenegotiations. By ensuring that the investmentchapters of trade agreements, as well as BilateralInvestment Treaties (BITs), include provisions thatsupport the free transfer of capital and otherprotections for U.S. investors, DO promotes thegrowth of cross-border investment. DO plays a keyrole in the development of U.S. trade and invest-ment policy, as well as retaining oversight ofCustoms’ revenue functions. DO supportseconomic ties through the exchange of tax infor-mation and works to initiate, complete, andupdate bilateral tax treaties and reform U.S.international tax rules to encourage efficientcapital flow by removing tax barriers to cross-border investment.

Since the World Trade Organization (WTO)conference in Doha, Qatar, in November of 2002,Treasury has advanced a proposal for the globalliberalization of trade in financial services. TheUnited States has completed free trade agreementswith Chile and Singapore. Negotiations areunderway with the Central American countries,Morocco, the Southern African Customs Union,and Australia. By 2005, the U.S. hopes to complete afree trade agreement for the whole western hemi-sphere – the Free Trade Area of the Americas (FTAA)– creating the largest free trade zone in history.

Measuring Success

The U.S. Gross Domestic Product (GDP) growthrate and the U.S. unemployment rate will be themeasures of our success domestically. Internation-ally, we will measure the real GDP growth indeveloping, emerging, and industrial markets, aswell as the proportion of people living on less than$1 a day. For free trade initiatives, we will measureour performance by the increase in U.S. trade(total imports and exports) and the negotiations ofagreements on trade, financial services and invest-ment.

Strategic Objective E1B: Provide aFlexible Legal and RegulatoryFramework

To achieve its full potential, the U.S. financialsector must be guided by a flexible legal andregulatory framework that allows financial institu-tions to offer a full array of competitive services.The legal and regulatory framework must ensure asafe and sound national financial system and mustpromote the growth of financial services, fair accessto financial services, and fair treatment of bankingand thrift customers.


In 2003, the federal financial regulatory agencies,including OCC and OTS, started a three-yeareffort to obtain suggestions from the industry andpublic on more streamlined and less burdensomeways to regulate.


Through its licensing and regulatory processes, theOCC supports national banks’ efforts to remaincompetitive and consistent with safety and sound-ness. The OCC works to streamline its licensingprocedures and keep regulations current, clearlywritten, and supportive of an effective supervisoryprocess. The OCC’s program of risk-basedsupervision focuses on banks’ abilities to properlymanage and control risks and tailors an individualbank examination to its risk profile activities.Federal-chartered banks operate under a set ofuniform national standards.

Without compromising regulatory responsibilitiesand the risk-based examination approach, OTSworks to adjust its operations and budget to ensureno increases in assessment rates. It tailors exami-nations to the risk profile of individual institutions.It conducts melded safety, soundness, and compli-ance examinations, and develops streamlinedexamination procedures for small institutions.OTS ensures that the application process isresponsive and streamlined, enabling the thriftindustry to provide competitive financial services.

Measuring Success

We will measure the percentage of applicationsprocessed within standard timeframes. We willalso gauge our success by minimizing the increasein assessment rates.

Strategic Objective E1C: Improve andSimplify the Tax Code

Treasury is committed to improving and simplify-ing tax laws and administrative guidance in amanner consistent with important tax policy goalssuch as fairness, efficiency, and effective enforce-ment. A more fair tax code would treat similarlysituated taxpayers the same and provide an equi-table distribution of the tax burden among taxpay-ers with different abilities to pay. A more eco-nomically neutral and rational tax system wouldallocate labor and capital to their most productiveuses, reduce interference with economic incentives,and be more conducive to economic growth. Asimpler tax system would reduce the significantcost of tax compliance for businesses and individu-als and reduce the intrusiveness of tax administra-tion.


DO has primary responsibility for efforts tosimplify and reform the tax code to reduce the costof compliance for businesses and individuals anddrive economic growth. DO prepares draft taxreform legislation and works to secure its enact-ment, while developing the fact base (e.g., timeand cost to file) that focuses and supports reforminitiatives and helps measure the impact of taxcode changes. In addition, DO works to simplifycompliance through the adminstrative guidanceprocess.

IRS will implement tax code reforms as theCongress passes corresponding legislation. IRSwill also reduce the cost of compliance by simplify-ing tax forms, making electronic reporting seam-less, and improving pre-filing guidance.

Measuring Success

We will measure the cost of compliance forindividuals and small businesses.


Strategic Goal E2- Promote Stable U.S andWorld EconomiesThe aim of this strategic goal is to create theconditions which allow the American people tofeel economically secure because they have thesavings and other resources necessary to live as theydesire, and are protected from financial frauds andother crimes. Achieving this goal requires a widerange of actions by Treasury, from promotingpersonal savings to protecting the security ofpensions, ensuring the privacy of personal infor-mation used in financial transactions, and main-taining the solvency of the government retirementprograms many Americans depend on.

This goal promotes stability in the world economicand financial systems to prevent crises. It also aimsto ensure that the world economic system is usedfor legitimate purposes, and to deny access to thosewho wish to commit financial crimes, such asmoney laundering and terrorist financing.


Domestically, Treasury works with, among others,the Federal Reserve System; the Food and DrugAdministration; the Bureau of Alcohol, Tobacco,Firearms, and Explosives; the Federal DepositInsurance Corporation; Customs and BorderProtection; the Federal Trade Commission; theU.S. Trade Representative; state agencies; and thebanking and thrift industries.

On global economic issues, Treasury’s key partnersinclude the Department of State, the FederalReserve System, the Export-Import Bank, theOverseas Private Investment Corporation, theOffice of the U.S. Trade Representative, theOrganization for Economic Cooperation andDevelopment, the Basel Committee on BankingSupervision, the Interagency Country ExposureRisk Committee (ICERC), G7 partners, G8partners, G10 partners, G20 partners, the Interna-tional Monetary Fund, and the multilateraldevelopment banks.


• Difficulty of international consensus. Failureamong officials from many different countriesand international institutions to agree on aneffective approach to international economicstability could delay progress in establishingnew or expanding existing arrangements.Moreover, the U.S. must forge agreement withother member countries in the IFIs to achievemany of the objectives and strategies notedunder this goal.

• Predominance of private finance. Privatecapital flows impede official sources. Thecapacity of the monetary authorities toinfluence events largely rests on their ability toinfluence financial markets’ expectations.


Key factors for economic security for the Americanpeople include:

• Difficulty of consensus. We can only achievesignificant initiatives regarding private pensionreform, Social Security and Medicare in thecontext of broader political consensus.

• Changes in the financial services industry.Competitive pressures, consolidation offinancial institutions, development of newproducts and services, and other changes inthe market will impact personal savings rates.

• Changing demographics. During the nextdecades, we expect the retirement of the baby-boomers to put pressure on the Social Securityand Medicare systems, particularly affectingretirement security objectives.

Key factors for the international financialsystem include:

• External shocks. Economic and financialshocks are difficult to predict, and the effec-tiveness of responses to them depends, to asignificant extent, on the adequacy of policiesother countries adopt and the reaction offinancial markets. In addition, factors such asnatural disasters, infectious disease, war, andcivil unrest may adversely affect economicperformance.

• Increased globalization and complexity. Therapid increases in the volume of financialtransactions, types of financial instruments,and number of global players challenge theability of the regulatory community to remainas modern as the market in its efforts topromote financial stability.


Strategic Objective E2A- IncreaseCitizens’ Economic Security

Economic security includes ensuring that Ameri-cans have adequate personal savings to supportthem in tough times or retirement; guaranteeingthat private pension plans will meet their obliga-tions to their beneficiaries; protecting consumersfrom fraud and deception; and protecting personalinformation used in financial transactions. It alsoincludes the long-term strategy for managing theSocial Security and Medicare programs. Lastly, itaddresses financial education, so that Americansare better prepared to manage their personalfinances.


To increase the personal savings rate and ensurepeople make informed financial decisions, DOcoordinates financial education efforts across theU.S. Government. DO supports pension legisla-tion that properly measures liabilities and alignsfunding targets so that all pensions have theresources necessary to support their beneficiaries.

DO, supported by FMS, ensures that policymakers and the public have accurate measures anda clear understanding of the long-term fiscalimbalances in the Social Security and Medicareprograms. Lastly, DO promotes legislation thatsafeguards sensitive personal financial information.

TTB will ensure that only qualified applicantsenter the alcohol and tobacco industries at thefederal level. The Bureau will monitor alcoholbeverages in the marketplace to detect contami-nated and adulterated products. TTB will alsoconduct investigations to ensure appropriate labeldesignation and/or product authenticity, and willinvestigate instances of prohibited trade anddistribution practices in the beverage alcoholindustry.

Measuring Success

We will measure increases in citizens’ economicsecurity by an increase in the wealth-adjustedpersonal savings rate. We will also measure theincrease in the proportion of U.S. adult popula-tions with retirement accounts.


Strategic Objective E2B- Improvethe Stability of the InternationalFinancial System

Treasury is committed to improving the stability ofthe international financial system in order toprevent crises, and to minimize the impact of thosethat do occur. Financial crises in developing andemerging markets can undo the benefits of years ofeconomic progress, throw millions into poverty,create political instability, and may require expen-sive international intervention. By continuing tobuild a more stable international financial system,Treasury will enhance the conditions necessary forgrowth and improved standards of living throughthe developing and emerging markets.

International Financial Institutions (IFIs), such asthe International Monetary Fund (IMF), theWorld Bank, and other multilateral developmentbanks (MDBs), play a key rolein enabling global economicgrowth and stability. Theymust use their resources in theright places, at the right times,and for the right reasons. TheU.S. is a major stakeholder inthe IFIs and contributes asignificant portion of theirresources toward the broaderobjectives of U.S. interna-tional economic policy. TheTreasury Department has theresponsibility for ensuring that the institutionsappropriately use the resources the U.S. contrib-utes. The Treasury Department works with othernations and the leaders of these institutions to helpstrengthen the IFIs’ effectiveness by encouragingand guiding implementation of key reforms.Through these reforms, the IFIs can better ensurethat they use the funds in the most effectivemanner, in the countries where they will have themost impact, thereby encouraging the mostsustainable and stable development activities anddelivering measurable results for their sponsors.


DO has the lead in developing and implementingthe U.S. Government’s emerging markets strategy

with the goals of less frequent crises, greaterownership of policy at the local level, increasedprivate capital flows, and higher credit ratings.Several important elements of this strategy includedeveloping a framework for analyzing and resolv-ing currency “mismatch” problems (i.e., overvaluedor undervalued currencies) with the goal ofavoiding sharp exchange rate fluctuations andpotentially expensive interventions; and improvingour measures of emerging market vulnerability inorder to better predict and prevent crises.

Treasury systematically reviews how the IFIs usethe money the U.S. government has invested inthem. In addition to this general oversight role,DO leads the effort to reform the IMF, the MDBs,and the Paris Club. The Paris Club is an informalgroup of official creditors whose role is to find co-ordinated and sustainable solutions to the paymentdifficulties experienced by debtor nations. Paris

Club creditors agree torescheduling debts dueto them. Reschedulingis a means of providing acountry with debt reliefthrough a postponementand, in the case ofconcessional reschedul-ing, a reduction in debtservice obligations. Partof the reform agendaincludes ensuring thatthe IFIs incorporate

measurable goals into their activities so they canquantify and assess their progress.

Measuring Success

We will measure our performance by the increasein the dollar volume of capital invested in develop-ing and emerging markets and by the reduction inthe number of crises in developing and emergingmarkets due to default on sovereign loans, cur-rency depreciation, or banking failures. We willalso measure the increase in the average Millen-nium Challenge criteria scores for federal funds goingthrough development banks and the decrease in thenumber of countries completing Paris Club processesthat later have debt sustainability problems.


Strategic Goal F3- Preserve the Integrity ofFinancial SystemsThe purpose of this strategic goal is threefold.First, it aims to ensure that the U.S. financialsystems will continue to operate without disrup-tion from either natural disasters or manmadeattacks. Second, it will keep the system free andopen to legitimate users, while excluding thosewho wish to use the system for illegal purposes.Third, it ensures that the U.S. financial system andaccess to U.S. goods and services are closed toindividuals, groups, and nations that threaten theU.S.’s vital interests.

The terrorist attacks of September 11, 2001 andensuing world events clearly identified the need toensure the continuous operation of the U.S.financial system during crisis. It also reinforced theneed to eliminate the international flow of fundsthat finance global terror. At the direction of thePresident, Treasury launched the financial front inthe war on terrorism and took the lead in globalefforts to combat the financing of terrorism andother financial crimes.


Treasury’s key partners include the Departments ofJustice (DoJ), State (DoS) and Homeland Security(DHS); the National Security Council (NSC);federal law enforcement agencies, including theFederal Bureau of Investigation (FBI), Bureau ofImmigration and Customs Enforcement (BICE),and the U.S. Secret Service (USSS); federalfinancial regulators and supervisors, including theFederal Reserve Board (FRB), the Federal DepositInsurance Corporation (FDIC), the Securities andExchange Commission (SEC), the Commoditiesand Futures Trading Commission (CFTC), andthe National Credit Union Administration(NCUA); state and local authorities; private sectorfinancial institutions, including banks, creditunions, money service businesses, and securitiesbroker/dealers; foreign jurisdictions and authori-ties; and international bodies, including the

Financial Action Task Force (FATF), the G7,International Monetary Fund (IMF), World Bank,various FATF-Style Regional Bodies (FSRBs),various multi-lateral development banks, theOrganization of American States (OAS), the BaselCommittee on Banking Supervision, and theEgmont Group of Financial Intelligence Units.


• Federal, state, local and internationalcooperation. Controlling the flow of funds toterrorists, enforcing international sanctions,and battling money laundering and otherfinancial crimes will require cooperation at alllevels. Achieving such widespread cooperationwill be an enormous endeavor.

• Changes in the financial services industry.Competitive pressures, consolidation offinancial institutions, development of newproducts and services, and other changes inthe market will impact efforts to improve thereliability and maintain the integrity of theU.S. financial system.

• Advanced technologies. Advances in repro-graphic technology are becoming moreaffordable and widely used, thereby broaden-ing the counterfeiting threat. Other newtechnologies, such as electronic cash, electronicpurses, Internet electronic payment systems,and Internet banking, increase the ability ofindividuals to rapidly transfer large sums ofmoney, and could pose a challenge to countermoney laundering efforts.


Strategic Objective F3A-Disrupt andDismantle Financial Infrastructure ofTerrorists, Drug Traffickers, and OtherCriminals and Isolate Their SupportNetworks

The Department of the Treasury leads the U.S.Government’s multi-faceted effort to keep theworld’s financial systems free and open to legiti-mate users, while excluding those who wish to usethe systems for illegal purposes. The broad rangeof activities in this area includes stopping the flowof money to terrorist groups, drug traffickers, andother criminals, disrupting their support networks.

Stemming the flow of funds to terrorist groups iscritical to our national security and the overall waragainst terrorism. Treasury works closely withother federal agencies–both as chair of the Na-tional Security Council’s Policy CoordinationCommittee (PCC) on terrorist financing andthrough other relationships–foreign governments,international bodies, and private financial institu-tions to attack the financial infrastructure ofterrorism.

Fundamental components of this effort includeidentifying, blocking, and dismantling terroristfinancial support networks; isolating them fromtheir funding sources; and denying them access tothe international financial system. The ExecutiveOffice for Terrorist Financing and FinancialCrimes (EOTFFC) is at the forefront of theseefforts. Through its work with the Office ofForeign Assets Control (OFAC) and the FinancialCrimes Enforcement network (FinCEN), andthrough direct outreach to foreign countries andinternational bodies such as the Financial ActionTask Force (FATF), the EOTFFC works to ensurethat all countries are cooperating and implement-ing appropriate measures in this effort.

Abuse of the financial system, however, is notlimited to terrorist financing. Treasury continuesto focus on other types of abuses and, in particular,money laundering by organized criminals, narcot-

ics traffickers, and corrupt foreign officials.Treasury will continue efforts to deny moneylaunderers access to the U.S. and internationalfinancial systems through law enforcement andappropriate financial regulatory initiatives, as wellas cooperation with foreign countries and interna-tional bodies such as the FATF. Treasury isdedicated to attacking money laundering anddisrupting all abuses of the domestic and interna-tional financial systems. To further this effort,Treasury coordinates development of the NationalMoney Laundering Strategy; issues and implementsmoney laundering regulations; investigates finan-cial crimes, and collects, analyzes and disseminatesfinancial intelligence to support foreign anddomestic law enforcement investigations. Treasuryalso investigates and enforces compliance withU.S. tax laws.


On the terrorism front, DO is developing andleading the U.S. anti-terrorists financing strategyin order to freeze terrorist assets and block terroristfinancing networks. DO is identifying the donors,facilitators and fundraisers for terrorist and cuttingthe money off at its source. DO is implementing acoordinated, global attack on terrorist financing byengaging international partners and ensuringworldwide compliance on counter-terrorismfinancing standards. Treasury leads interagencyteams overseas to work with foreign central banks,finance ministries, and regulators to tighten theirlaws and regulatory oversight of terroristfundraising groups.

In addition to focusing on terrorist financing,Treasury is combating money laundering byorganized criminals, narcotics traffickers, corruptforeign officials, and other criminals. To imple-ment the National Money Laundering Strategydomestically, Treasury is expanding the reach ofanti-money laundering obligations under the BankSecrecy Act (BSA) and the USA Patriot Act,ensuring compliance with those laws and regula-tions.


FinCEN, with DO, issues BSA and USA PatriotAct regulations. FinCEN, working with thefinancial regulators and supervisors, monitors andensures compliance. FinCEN supports lawenforcement by collecting, analyzing, and dissemi-nating financial intelligence to support investiga-tions. In a modernization effort, FinCEN seeks tocollect most BSA information electronically;modernize its BSA database systems; implement auser-friendly data retrieval system; and provideenhanced access to law enforcement through theGateway process.

The IRS-CID (Criminal Investigation Division)participates in an array of law enforcement taskforces, including the FBI’s Joint Terrorism TaskForces (JTTFs) and U.S. Attorney’s Offices’ Anti-Terrorism Task Forces (ATTFs). The IRS contrib-utes to the National Money Laundering Strategy byassisting in the enforcement of the BSA and USAPatriot Acts through the identification of High-Risk Money Laundering and Related FinancialCrimes Areas (HIFCAs).

Internationally, Treasury seeks to secure – bothbilaterally and through international bodies such asFATF, IMF, and the World Bank – global compli-ance with international anti-money launderingstandards, developing the capacity of foreignfinancial intelligence units, and improving its owncapacity to assist and act on the information theseforeign units provide. DO, OFAC, FinCEN, andIRS play significant roles in this effort.

To address foreign narcotics traffickers, OFAC,operating primarily under the InternationalEmergency Economic Powers Act (IEEPA) and theForeign Narcotics Kingpin Designation Act, works

to freeze the assets of key individuals and businessenterprises of foreign narcotics trafficking organi-zations. OFAC coordinates with law enforcementand refers leads and background information tosupport criminal investigations and prosecutions.

FinCEN contributes to the international effortoperationally by assisting foreign investigationsand structurally by providing training and techni-cal assistance to foreign countries developing theirown financial intelligence units.

Measuring Success

We will measure our progress by the percentageincrease in the number of drug trafficking andterrorist related financial networks identified andmade public, and by the percentage increase inassets frozen under drug and terrorist relatedsanctions programs.

We will also measure the level of internationalcompliance with the FATF recommendations onmoney laundering, terrorist financing, and thenumber of financial crimes cases referred andsupported for prosecution.

In addition to the quantitative measures, qualita-tive factors resulting from the designation pro-grams will be examined. These include theimportance in the drug trafficking world of newlydesignated drug kingpins, the significance and costof specific business designations to drug cartels,and the significance of specific designated terror-ists, i.e. the key nodes for terrorist financing.


Strategic Objective F3B- Execute theNation’s Financial Sanctions Policies

DO, primarily OFAC, has responsibility fordesigning, implementing, and enforcing a varietyof statutes, executive orders, and regulationsimposing economic sanctions on foreign entities tofurther the foreign policy and national securityobjectives of the United States. The design ofeconomic sanctions also involves InternationalAffairs and the Office of General Counsel.

Generally, U.S. economic sanctions deprive targetsof the use of their assets and/or deny them benefitsof trade with the United States. Certain programsremove assets from the control of those that woulduse them to harm U.S. citizens and interests. Theeconomic sanctions programs are primarilydirected against countries and groups of individu-als, such as terrorists and narcotics traffickers, whoengage in activities that pose an extraordinarythreat to the national security, foreign policy or theeconomy of the United States.

Sanctions programs may be either comprehensiveor selective, using the blocking of assets and/ortrade or investment restrictions to accomplishadministration policy and goals. For certaincountries, the sanctions apply to dealings with thatnation’s government and/or with other countries.The prohibitions extend not only to dealings withthe government, but also to its country’s citizens,residents, and commercial enterprises. Prohibitionsalso apply to specific individuals and entitiesidentified as specially designated nationals (SDNs),

specially designated narcotics traffickers andkingpins (SDNTs and SDNTKs), speciallydesignated global terrorists (SDGTs), and foreignterrorist organizations (FTOs).

In administering these programs, OFAC generallyrelies upon Presidential authorities contained inthe Trading With the Enemy Act (TWEA), theInternational Emergency Economic Powers Act(IEEPA), or upon specific legislation to prohibit orregulate commercial or financial transactions withspecific foreign countries or groups.


DO, in particular, International Affairs andOFAC, develops and implements the U.S.Government’s financial sanctions policies. Theyidentify, trace, and freeze sanctioned assets; issuelicenses; support prosecutions related to financialsanctions policies; and impose fines for violationsof sanctions policies. DO also works with interna-tional partners to coordinate global enforcement ofsanctions policies. The design of economicsanctions also involves International Affairs andthe Office of General Counsel.

Measuring Success

Our key performance measure will be the decreasein the estimated flow of funds from the U.S. tosanctioned entities.


Strategic Objective F3C- Increase theReliability of the U.S. Financial System

Our Nation’s financial system must remainoperational at all times. Treasury is responsible forensuring the strength and resilience of critical U.S.financial markets, and minimizing the potentialeffects of wide-scale disruptions. Additionally, therecent string of corporate scandals signals the needfor better corporate governance to ensure thereliability of the U.S. financial system. Treasuryensures the integrity of the national currency andthe safety of funds placed in financial institutions.Treasury also administers a temporary federalprogram, established by the Terrorism RiskInsurance Act of 2002, which provides for atransparent system of shared public and privatecompensation for insured losses resulting from actsof terrorism.


DO and bureaus develop and implement criticalinfrastructure protection policies that strengthenboth the U.S. financial system and the fiscalsystems of the U.S. Treasury.

DO administers the Terrorism Risk InsuranceProgram (TRIP), which was enacted by theTerrorism Risk Insurance Act of 2002 on Novem-ber 26, 2002. The new law establishes a tempo-rary Federal program that provides a transparentsystem of shared public and private compensationfor insured losses resulting from acts of terrorism,to protect consumers by addressing market disrup-tions and ensure the continued widespread avail-ability and affordability of property and casualtyinsurance for terrorism risk. In addition, TRIPallows a transitional period for the private marketsto stabilize, resume pricing of such insurance, andbuild capacity to absorb any future losses, whilepreserving state insurance regulation and consumerprotections.

DO promotes enhanced corporate disclosure andgovernance to protect American investors andimprove confidence in financial markets.

BEP designs and manufactures high qualitysecurity documents (including currency) that meetcustomer’s requirements for quality, quantity, andperformance as well as deter counterfeiting. In thenear-term, BEP will issue redesigned currency tofurther enhance security and deter counterfeiting.

OCC ensures risks to the national banking systemare anticipated, understood, addressed, andconveyed to national banks through examinationsthat review banks’ accounting practices and theintegrity of their management information sys-tems, business continuity plans, off-balance sheetactivities, and other aspects of an institution’scorporate governance. The OCC leads efforts tocoordinate supervisory activities performed innational banks by the various federal regulators,and chairs the Electronic Banking Group of theBasel Committee to address global electronicbanking issues. The OCC also participates on theFinancial Banking and Infrastructure InformationCommittee (FBIIC) that facilitates federal effortsto improve the reliability and security of the U.S.financial system.

OTS ensures that OTS-regulated thrift institutionsoperate in a safe and sound manner througheffective supervision, and asseses the financialcondition and risk profile of thrift institutionsthrough examinations to identify violations of lawand regulation and potential financial and eco-nomic problems. OTS monitors capital levels andearnings performance in order to minimize theoccurrence of inadequately capitalized thrifts andenable the prompt resolution of risks. During2002, OTS began the process of combining safety,soundness, and compliance examinations toenhance overall effectiveness.

OTS participates on FBIIC, chaired by theTreasury Department, and works with the Depart-ment of Homeland Security and the Office ofCyberspace Security to improve the reliability andsecurity of the financial industry’s infrastructure.OTS reviews continuity of operations and emer-gency preparedness plans during exams.


The Mint makes a continuous effort to implementnew and innovative coin production technology inthe context of changing market conditions andlegislated requirements for coinage and design.

The Mint designs cost-effective marketing, adver-tising, and promotion programs to provide qualityproducts and services to expand and maintain itscustomer base. The redesigned coins, as exempli-fied by the new nickel to commemorate the 200thanniversary of the Lewis and Clark expedition,mark the importance the Mint places on creatingbeautiful coin designs that reflect America’sdiversity.

Measuring Success

We will measure the:

• Number and degree of negative shocks to the U.S.capital markets;

• Strength of the national banks and thriftsthrough composite CAMELS scores (a measureincorporating many aspects of a financialinstitution’s health);

• Ability of key financial institutions to recoverclearing and settlement activities in event ofdisruption; and

• Estimated counterfeiting rates of new bills.


Strategic Goal F4- Manage the U.S. Government’sFinances EffectivelyAs the primary fiscal agent for the Federal Govern-ment, Treasury manages the Nation’s finances bycollecting money due the United States, making itspayments, managing its borrowing, performingcentral accounting functions, and producing coinsand currency to meet demand. The Department ofthe Treasury serves as the primary federal taxcollecting agent and collector of revenue onregulated commodities.

Treasury oversees, accounts for, and reports ongovernment collections and expenditures, is thechief disburser of federal payments, and collectsdelinquent federal debt government-wide. TheDepartment determines and executes the federalborrowing strategy to meet the monetary needs ofthe Government at the lowest possible cost. Thegoal of all these activities is to provide the Ameri-can public with cost-effective, efficient, and securemanagement of federal finances, while employingmodern technology and providing quality cus-tomer-centered service.


• Changes in the Internal Revenue Code.Changes made for various policy reasons to theCode often pose challenges for tax administra-tion. Furthermore, changes intended tosimplify the Code depend on a politicalconsensus.

• Electronic commerce. The speed of adoptionof electronic commerce will have an effect onthe administration and collection of taxes.

• Market conditions. Market conditions affectdemand and interest rates. Increases in interestrates generally result in increased consumerawareness of investment alternatives.

• Statutory limit on amount of debt. Thedebt limit could potentially restrict the abilityto borrow.


Treasury works with, among others, the Depart-ments of Transportation, Education, Agriculture,Veterans Affairs, Labor, Justice (and FBI), Trans-portation, Homeland Security (and USSS),Housing and Urban Development, Health andHuman Services, the U. S. Postal Service, thePension Benefit Guaranty Corporation, State TaxAgencies, National Credit Union Administration,practitioner and preparer associations, community-based coalitions, low-income tax clinics, thebanking and thrift industry, tax software profes-sionals, the Federal Reserve System, the JointFinancial Management Improvement Program(JFMIP), and international financial institutions.


Strategic Objective F4A- CollectFederal Revenue When Due, Througha Fair and Uniform Applicationof the Law

The Department of the Treasury must collect therevenue due to the Federal Government in amanner that is not only timely but also fair. In thecontext of tax collection, fairness is primarily aproduct of compliance. Treasury works to educateall Americans and help them meet these obliga-tions. Treasury also works to increase the electroniccollection of payments and improve the ease ofpayment.


DO is working to increase compliance with taxlaws by supporting IRS compliance initiatives andinitiating, completing and updating tax informa-tion exchange treaties with other nations. DO isalso implementing a variety of procedures toenhance the timeliness and quality of administra-tive guidance to ensure that taxpayers understandtheir responsibilities, and to administer the taxlaws appropriately and fairly. On the legislativefront, DO is seeking enactment of Treasuryproposals to combat abusive tax shelters. It is alsoseeking legislation authorizing the use of privatecollection agencies.

IRS works to improve compliance through betterand more targeted taxpayer education, enhancedreporting, more voluntary agreements, improvedregulations, earlier intervention, and a reduction inthe length of the appeals process. IRS is maximiz-ing the collection of delinquent non-tax debts andreferring delinquent non-tax debt owed by com-mercial vendors, separated employees, and non-government agencies to FMS for collection.

IRS is working to enhance and expand the avail-ability of its electronic services, including the IRSwebsite, electronic filing, and electronic payments.IRS will expand electronic document repositoriesand develop a multilingual centralized database.

IRS is enhancing its pre-filing guidance in order toimprove tax payers’ understanding of complex taxlaw provisions. IRS is modernizing its work

processes and expanding its partnership withindividuals and organizations by helping taxpayersfile returns, increasing electronic filing options,making notices and letters are more understand-able, expanding multi-lingual customer assistance,and paying refunds faster.

TTB is working to increase compliance by apply-ing state-of-the-art statistical methods to measureand analyze compliance with tax laws, and identifyany gaps in tax payments. TTB will also movefrom random selection of audit targets to risk-based selection, and will investigate and assist withthe prosecution of business entities suspected ofbeing involved in tax evasion schemes, includingdiversion and smuggling of taxable commodities.TTB will forge partnerships with, and providetraining to, federal, state, and other governmentalentities to enforce tax laws.

TTB will enhance online information for taxpayersand other industry members to make complyingwith regulations easier. TTB will provide regulations,forms, and other information in plain languageformat, and continue to create alternative excise taxreturn filing methods through e-Government.

Legislation is proposed to establish a permanentand indefinite appropriation to reimburse financialinstitutions for services they provide as depositoriesand financial agents to the Federal Government.These services support FMS programs that “collectrevenue” electronically, including the ElectronicFederal Tax Payment System (EFTPS), theLockbox Network, plastic cards, ElectronicTransfer Accounts (ETA) and CA$HLINK.

FMS and the IRS, along with the small businesscommunity, are working on strategies to signifi-cantly increase the number of EFTPS enrollments.Additionally, FMS will continue to exploremethods for reducing the costs of its bankingservices, using less expensive electronic mechanismssuch as Paper Check Conversion at lockbox sites.


Measuring Success


• Reduction in the potentially collectable inventory;

• Proportion of tax returns filed electronically;

• Closure to receipt ratios;

• Coverage rates;

• Levels of service;

• Tax compliance rates through the NationalResearch Program; and

• Fairness of the tax system administration asmeasured by scores on the IRS’s customer satisfac-tion survey.

Strategic Objective F4B- ManageFederal Debt Effectively and Efficiently

Treasury is responsible for borrowing what isnecessary to meet the Government’s financingneeds. The sum of all borrowing is called the grossfederal debt. Treasury’s goal is to provide govern-ment financing at the lowest cost over time.Issuing debt regularly and in predictable quantitiesfulfills this mission. The risks to regular andpredictable issuance include unexpected changes inour borrowing requirements, the demand for oursecurities, and anything that inhibits timely sales ofour securities. To reduce these risks, Treasuryclosely monitors economic conditions, fiscalpolicy, and market activity and, when necessary,responds with changes in debt issuance based onthorough analysis and discussions with marketparticipants. We also seek to lower our borrowingcosts by ensuring timely, reliable sales of securitiesthrough continuous improvement in the auctionprocess.


DO works to effectively finance governmentoperations, including efficiently meeting theGovernment’s borrowing needs. In order tomeasure success and focus further efforts, DO isdeveloping and using metrics to track the relativecost of financing the U.S. Government. Treasuryis also working to secure a long-term legislativesolution to the debt ceiling issue.

BPD is working to effectively finance governmentoperations, and efficiently meet the borrowingneeds of the Federal Government. As part of thateffort, it is, with the support of DO, moving to a100% paperless savings bond program, and aimingto achieve “two minute auction” performance.

FMS is working to maximize the collection ofdelinquent debts. FMS establishes and maintainsalliances with customer agencies and stakeholdersthat promote effective debt collection policies andprocedures. FMS utilizes all available cross-servicing tools and is expanding the offset pro-gram, baring delinquent debtors from obtainingfederal loans and loan guarantees. FMS is increas-ing the referral of eligible, legally enforceable debtsfor its offset and cross-servicing systems.

Measuring Success

We will measure success by the cost per dollar ofdebt issued, divided into operational and financingcosts.


Strategic Objective F4C- MakeCollections and Payments on Time andAccurately, Optimizing use of ElectronicMechanisms

Treasury collects approximately 95 percent of totalfederal receipts, such as individual and corporateincome and other taxes, duties, fees, debts, andother money owed to the U.S. Government. TheDepartment devotes the bulk of its resources tocollecting taxes. Each year the IRS collects morethan $1.5 trillion primarily through the EFTPS.FMS administers the world’s largest collectionsystem, including EFTPS, and facilitates efficientcollections by promoting electronic collections tofederal agencies. The purpose of this objective istimely, complete collection of all monies due thegovernment consistent with good customer serviceand “best practice” business efficiency.


FMS will continue to concentrate efforts onconverting remaining check payments to electronicfunds transfers (EFT). FMS is currently workingwith the Federal Reserve System and the SocialSecurity Administration on initiatives involvingEFT research, marketing, and education cam-paigns. FMS will work with the IRS to meet theCongressional mandate for IRS to collect 94percent of business taxes electronically. They willaccomplish this through expansion of electroniccollections such as Pay.gov, EFTPS-On Line, andPaper Check Conversion. FMS will also use PaperCheck Conversion at its Lockbox sites to reducepaper processing at Lockbox banks and improvethe efficiency of the Lockbox system.

FMS has undertaken efforts to modernize itspayment system, incorporating new technologies,on the Internet. In FY 2003, FMS will implementthe Secure Payment System, a more efficient andsecure, web-based replacement for the currentElectronic Certification System used by FederalProgram Agencies to certify payments. Addition-ally, FMS initiated projects to consolidate, im-prove, and replace its 35 payment applications andto replace and upgrade its check payment and

reconciliation system. These two efforts are knownas Payments Application Modernization and theTreasury Check Information System.

FMS will also continue to maintain a leadershiprole in the Automated Clearing House (ACH) andefforts to upgrade and expand the application forone of two grants payment systems, AutomatedStandard Application for Payments (ASAP).

Measuring Success

We will measure the percentage of payments andcollections made electronically, on-time, andaccurately.

Strategic Objective F4D- OptimizeCash Management and EffectivelyAdminister the Government’s FinancialSystems

Treasury manages the government’s cash positionto ensure that funds are available on a daily basis tocover federal payments. Managing thegovernment’s cash flow with the most up-to-dateand accurate information benefits the taxpayer byenabling Treasury to maximize investment earningsand minimize borrowing costs within establishedpolicy objectives. To accomplish this objective,Treasury must closely monitor the government’sreceipts and payments and accurately forecast thegovernment’s current and future daily cash require-ments. In addition, Treasury must execute itsborrowing operation in an efficient and reliablemanner.

Treasury plays a key role in strengthening theFederal Government’s financial infrastructure. Thisinfrastructure provides government-wide account-ing and reporting services; compiles and publishesgovernment-wide financial reports; operates thegovernment’s collection and deposit systems;provides central payments services for ExecutiveBranch agencies; processes and resolves claims onall lost, stolen, and forged payments; oversees theFederal Government’s daily cash flow; managesgovernment-wide debt collection services; andprovides government-wide policy and assistance forcash and credit management.


Treasury is also responsible for providing accurateand timely financial statements of the FederalGovernment, principally through the publicationof the Daily Treasury Statement, the MonthlyTreasury Statement, the Annual Report of the U.S.Government (formally the Combined Statement ofReceipts, Outlays, and Balances of the United StatesGovernment), and the Financial Report of the U.S.Government.


DO, working with FMS, will make the manage-ment of the Federal Government’s cash programmore efficient and effective by continually enhanc-ing the government’s cash management systemsand improving and formalizing models for project-ing the government’s cash position.

FMS will continue to place increased emphasis onimproving the quality, timeliness and integrity ofthe Federal Government’s financial data. FMS’Government-wide Accounting ModernizationProject will improve the reliability, timeliness, andexchange of financial information between FMS,Federal Program Agencies (FPAs), the Office ofManagement and Budget, and the bankingcommunity. This new system will improve thereliability and timeliness of the Government’sfinancial information and provide FPAs and otherusers with better access to that information.

FMS will continue its work with the FPAs toadopt uniform accounting and reporting standardsand systems. FMS will develop a government-wide infrastructure to standardize definitions offederal accounting terms and their usage, andprovide to agencies an interactive U.S. StandardGeneral Ledger website and database. DuringFY 2002, the Federal Government’s cash position,budget surplus, and deficit information was onschedule and accurate 100 percent of the time.FMS is working to continue that consistency.

DO leads the effort to establish best practices forU.S. Government financial reporting, and to makethe U.S. Government financial report a model for

forward-looking financial reporting. Treasury isexploring ways in which to issue a guide to govern-ment financial reports that would help citizensinterpret and understand U.S. Governmentfinancial reporting.

FMS, with OMB and GAO, is developing a newprocess for preparing the consolidated FinancialReport of the U.S. Government. The new process,which it will use for the FY 2004 Financial Report,will prepare the Financial Report from agencyfinancial statements and other relevant financialinformation, and strengthen control over intra-governmental transactions. FMS will continue towork cooperatively with GAO, OMB, and programagencies to eliminate the issues that prevent anunqualified opinion on the Financial Report of theUnited States Government.

Although some issues are outside the scope ofFMS, FMS will continue to assist agencies byproviding guidance and support and enhancingprocesses it oversees. FMS is developing a newprocess for preparing the Financial Report to meetthe new accelerated timeframe set forth by OMB,and enhance the integrity of the Report. Whenimplemented, the new process and new intra-governmental business rules will mitigate thematerial weaknesses in the current process.

BPD will improve the clarity, utility and availabil-ity of federal debt financial information; supportand influence the FMS initiative to modernizegovernment-wide accounting; and actively partici-pate in the development of federal debt and loansreceivable accounting standards.

Measuring Success


• Net cost of cash balances;

• Readability and accessibility of financial state-ments (via outside, independent assessment); and

• Timeliness of financial statements.


The Department of the Treasury strives to promotenational prosperity through economic growth andjob creation; maintains public trust and confidencein our economic and financial systems; and ensuresthat it has the workforce, technology, and businesspractices to meet the nation’s needs effectively andefficiently.

We will realize our Strategic Goals by building astrong institution that is citizen-centered, results-oriented, and actively promotes innovationthrough competition. Treasury will work effec-tively and efficiently to implement the President’sManagement Agenda and continuously improveour internal business operations.

All Treasury bureaus have means, strategies, andsuccess metrics to drive their performance, achievetheir performance goals, and become world class inmanagement practices. The means and strategiesdescribe a Treasury-wide framework that providesguidance to our policy offices, operating bureaus,and our most import asset, our employees.

Strategic Goal M5 – Ensure professionalism,excellence, integrity and accountability in themanagement and conduct of the Department ofthe Treasury (M5)

The Department of the Treasury has a diverseportfolio of products and services. We are strength-ening the communication and relationshipsbetween our policy offices and the operatingbureaus to focus on meaningful business results,with an emphasis on improving financial manage-ment.

We are strategically aligning Treasury policies,business plans, programs and resources to achievemeaningful business results. The Treasury StrategicPlan for FY 2003 – 2008 and its implementationreflects this alignment. From senior leadership tomanagement levels to line staff, the Treasuryworkforce was engaged to develop an integratedplan in which policies and operations aligned.Continuing efforts to further align these elementsare accomplished through regular meetings,integrated performance and budgeting, and arefocusing on our core businesses.



All bureaus, external evaluators, and other agenciesare partners with Treasury in achieving thePresident’s Management Agenda and drivingTreasury to achieve world class performance.

Key Factors Affecting Achievement of thisGoal:

The alignment of policies, business plans, pro-grams and resources will present opportunities tostrengthen the Deparment of the Treasury.

Strategic Objective M5A – Protect theIntegrity of the Department of theTreasury

Treasury is committed to preserving and protectingthe integrity of the Department, its programs,policies and initiatives. The independent efforts ofan inspector general to ensure fairness, integrity,independence, objectivity, proficiency and due carein performing our work in all of Treasury, includ-ing its bureaus serve to detect and prevent miscon-duct and mismanagement by personnel andprograms. Their audits, inspections and oversightare continuously addressed and contribute totaking corrective actions and improving ourefforts. The Treasury Bureaus rely on independentaudits, inspections and oversight in their ongoingprogram evaluations.

We will ensure fairness, integrity, independence,objectivity, proficiency, and due care in performingour work. We will protect the integrity of ourprograms, our operations and our management.


All Treasury entities rely on the advice, guidance,and counsel of a variety of independent audits andauditors, evaluations and evaluators, both internaland external to point out weaknesses, recommendimprovements, and provide oversight. We willcontinue to act appropriately and efficiently,making changes and adjustments as needed.

Strategic Objective M5B – ManageTreasury Resources to effectively toAccomplish the Mission and ProvideQuality Customer Service

The President’s Management Agenda (PMA)provides a viable framework upon which to achievethis objective, achieve world-class excellence, anddeliver on results that matter. We will:

• Strengthen workforce management to providethe leadership capacity, people tools andtechnology to ensure a diverse workforcecommitted to excellence

• Achieve efficient and effective competitionfrom all sources to achieve our mission in themost cost effective manner;

• Improve financial performance;

• Expand electronic government; and

• Integrate budget decisions with performanceassessment to ensure Treasury is cost effectivelydelivering results for the American people.

❖ Strengthen Workforce Management toProvide the Leadership Capacity, People,Tools, and Technology to Ensure a DiverseWorkforce Committed to Excellence

Treasury will strategically manage its workforce byaligning human capital strategies to agencymission, core values, goals, and objectives. We willuse strategic workforce planning and flexible toolsto recruit, retain, and reward employees, thusdeveloping a diverse, high-performing workforce.We will inventory the core competencies needed tomeet our goals and objectives and determine thebest resources to achieve desired results. We will beflexible in our options, including competitivesourcing to provide the best value to Americancitizens. We acknowledge as an organization thatall managers are responsible and accountable forthe effective management of human capital.



Treasury is actively working to enhance thediversity and skills of its workforce through severalinitiatives:

• Realign human capital to provide optimal serviceat the best value to taxpayers

Human Resources (HR) is taking steps toalign Treasury’s workforce with its objectivesand meeting its performance goals in a costeffective manner. HR is optimizing itsworkforce by consolidating HR services andredesigning Treasury HR to move to a morestrategically focused operation and increase thespan of control. We continually evaluateopportunities to improve efficiency andperformance by opening activities to competi-tion, and potentially outsourcing them to theprivate sector.

• Provide professional development opportunitiesand assure continuity of leadership and knowl-edge through succession planning

Treasury continues to make progress in thearea of executive development as we work tofurther develop an effective leadership cadrewith the competencies necessary to lead theDepartment. Among other initiatives, we haveimplemented an OPM-approved candidatedevelopment program for the merit-basedselection of individuals with leadershippotential, expanded the Treasury ExecutiveLeadership Program (TELP) to include GS-15employees, and begun to develop individualdevelopment plans for leadership and staff.Treasury will create a comprehensive succes-sion planning program that will incorporateand integrate these existing initiatives withother HR systems.

• Implement an effective performance managementsystem

Treasury is committed to providing employeeswith challenging work, honest feedback, andopportunities for growth, and recognizing and

rewarding delivered results. A key element isbuilding a performance management systemthat effectively differentiates between high andlow performance, and links individual andteam performance to organizational goals.

• Work to sustain a diverse workforce, especially inmission-critical occupations and leadershippositions

Treasury continues to reduce diversity gaps incritical occupations. We have created a newon-line workforce analytical tool that givesmanagers and leaders direct access to a varietyof standard reports on race, sex, national origin,and disability data on Treasury employees.

• Become a competency-based organization,especially in the area of financial performance

We are working to enhance required compe-tencies for mission-critical occupations,identifying skill gaps, and working to fillthem. We are pursuing this effort at both acorporate level and within the bureaus. Ournext critical steps will be to identify trainingopportunities to support competency develop-ment, and institute annual bureau gap analysisand plans.

• Manage our human capital by data-drivenmeasurable outcomes

Treasury is developing the tools and processesnecessary to measure and rate our performanceon achieving our workforce goals. Treasury’sHuman Capital Action Plan serves as theagency’s human capital accountability system.The expectations of the Assistant Secretary forManagement and CFO for human capitalcommunicates accountability andmanagement’s role in achieving success. Tofurther track our successes, we developed aweb-based tracking dashboard for monitoringagency progress. We will incorporate OPMmeasures in our process and explore partner-ship opportunities with the IRS to develop


Treasury specific standards. We will link SESperformance standards with human capitalaccountability and develop tools to assessleadership effectiveness.

• Promote safety, health and environmentalprotection for our workforce

The health of our workforce is an importantconcern. We communicate to our workforceprocedures promoting safety and health andfor preventing environmental issues. Weconduct physical site assessments of officebuilding and other locations as well as behavioroperations evaluations; and develop programsto reduce the frequency and severity of illness/injury, property, and tort claims losses.

Measuring Success

We will measure our success by the:

• Effectiveness of our performance managementsystem;

• Number of positions having succession plans;

• Diversity and skills of our workforce;

• Reduction in the number of lost production days;and

• Reduction in the lost time injury and illness rates.

❖ Achieve Efficient and Effective CompetitionFrom all Sources to Achieve Our Missionand Goals in the Most Cost EffectiveManner

To deliver services effectively and at the lowest costpossible to American taxpayers, Treasury will lookboth internally and externally for the most efficientways to achieve its mission, opening up forcompetition our processes and activities as appro-priate.


Treasury has developed processes and infrastruc-ture to support our competitive sourcing programand will continue to refine these processes in thefuture. We will also continue to assist in creating agovernment-wide infrastructure for competitivesourcing. Treasury’s largest bureau, IRS, willincrease its competitive sourcing staff in order toexpand the number of competitions that it con-ducts. Other Treasury bureaus will leverage thegrowing capacity of the Department for guidanceand assistance to implement their programs andsupervise their related competitions.

We will continue to reduce the time necessary tocomplete competitions as we incorporate thelessons learned from previous competitions, anddevelop an experienced cadre of procurement andcompetitive sourcing program managers. Treasurywill measure and track the cost and productivityimplications of completed competitions to focusour efforts, improve competition structuring andmanagement, and ensure that completed competi-tions achieve their stated objectives.

Measuring Success

We will measure the percentage of full-timeequivalent employees (those listed on the approvedFAIR Act inventories) who have been subject topublic-private competitions. We will also measurethe number of annual competitions, as well as theestimated savings and productivity implicationsfrom the completed competitions.

❖ Improve Financial Performance

Treasury will build or procure financial systemsthat produce accurate and timely information tosupport operating, budget, and policy decisions.Treasury is taking a government-wide lead inaccelerating financial reporting and will continueto lead the Administration’s effort to improvemonthly, quarterly, and year-end accounting close


process and procedures. As part of this effort,Treasury has made, and is continuing to makesignificant improvements in the performance of itsFranchise and Working Capital Funds.


• Meet accelerated November 15 deadline foraudited financial statements

Treasury has already met this goal as identifiedin the FY2002 Performance and Accountabil-ity Report. We will further streamline ourfinancial reporting processes and strengthenour accounting practices in to continue tomeet this goal in future years.

• Use financial and performance informationconsistently during operational evaluation anddecision-making

Treasury is pursuing several opportunities toexpand its performance management system tocollect and link with financial data fromTreasury’s financial system. In addition,Treasury is working with bureaus to developcost centers that would collect and consolidatefinancial data by program. Treasury will usethese improved sources of financial andperformance information to support effectiveoperational evaluations and decision-making.

• Track and report monthly performance metrics,and make them available on-line

Treasury will implement the government-widemetrics for measuring performance in each ofseveral financial performance areas, includingtravel and purchase card programs, delinquentaccounts receivable, non-credit card invoices,and electronic payments. We will use metricsto evaluate performance against goals in theseareas, helping to focus operational improve-ment efforts and hold managers accountable.

• Maximize the effectiveness and efficiency of theTreasury Franchise and Working Capital Funds

In its Franchise and Working Capital Funds,Treasury is promoting efficiencies in thedelivery of products and services by introduc-ing competition among service providers,while increasing the breadth of our competi-tive area across the Federal Government. Weare examining our service providers andproduct offerings and consolidating or elimi-nating those that are redundant. We areholding each business line accountable forrevenues and expenses, and full cost/selfsufficiency, reporting product costs. We areenhancing customer satisfaction by measuringresults from our customers, stakeholders, andemployees and holding managers accountablefor their performance.

• Other initiatives

Treasury will continue to encourage bureaus tomonitor and control the level of improperpayments. To further this effort, we will surveyTreasury bureaus for risk assessments, results,and action plans to reduce improper payments.

Treasury will build on its success at receivingclean audit opinions, and will ensure that theprocesses and systems (e.g., the three-dayclose) stay in place to maintain clean auditopinions in the future.

Treasury will continue its aggressive efforts toclose both auditor-identified and Integrity Actweaknesses, and to maintain integratedfinancial systems that provide timely andreliable financial information.

Treasury will enhance the processes and controls todisburse agency funds in strict accordance withappropriations law.


Measuring Success

The consistency of clean audit opinions on ourannual financial statements is a key metric ofsuccess. We will measure the number of days ittakes to close our monthly statements, and ourability to deliver on the accelerated deadline foraudited financial statements. Our evaluation of ourfinancial performance metrics will be used toinfluence management decision-making andoperational improvements. We will measuresuccess through our efforts to:

• Use financial and performance informationconsistently during operational evaluation anddecision-making;

• Track and report monthly financial performancemetrics; and

• Maximize the effectiveness and efficiency of theTreasury Franchise and Working Capital Funds.

❖ Expand Electronic Government

Treasury-wide IT governance is the CIO’s highestpriority. With rigorous IT governance enterprise-wide, Treasury will be able to allocate resourceseffectively and deploy the IT infrastructure andenterprise services needed for an integrated,reliable, secure, and easy-to-use suite of Treasury e-Government services.

The refined Treasury IT governance frameworkconsists of four pillars:

• Structure. A cornerstone of the governanceframework is the newly established TechnologyInvestment Review Board (TRIB) that setsTreasurywide IT priorities, evaluates prospec-tive IT investments, tracks past investments,and makes recommendations to the CapitalInvestment Review Board (CRIB).

• Process. Working closely with the CFO, theCIO is increasing the level of the OCIO’sengagement in the budget process. This willensure that the Treasury CFO reviews thehighest quality business cases possible.

• Technology. The CIO is seeking to deploy alimited number of simple, cost-effective, andhighly practical portfolio management tools toimprove investment program visibility,tracking, and manageability.

• Culture. Promoting the necessary culturalchanges associated with IT governance is vital,and will continue to be a high priority in theDepartment.


Treasury has several initiatives underway to expandits use of electronic government:

• Focus IT spending on high priority moderniza-tion initiatives

Treasury’s mission and objectives are thefoundation for our IT strategy and guide ourIT spending. Treasury’s ongoing plan fortechnology modernization supports themission of the Department, including finan-cial management, economic policy, andinitiatives to disrupt terrorist financing. Wewill identify high priority enterprise solutionsto eliminate duplicative and overlapping assets.Treasury has numerous IT initiatives underwayto deliver new and improved e-Governmentservices.

1. Ensure major IT projects are within 10 percentof cost/schedule/performance objectives. To ensurecost effective management of the Treasury ITportfolio, the Department will refine its ITgovernance system. The new IT governancesystem will achieve four key goals:

2. Develop projects in manageable units. Treasurywill promote modular, performance-basedcontracts that offer flexibility in expanding orreducing projects as outcomes require.

3. Include an Earned Value Management System(EVMS) in all contracts. Treasury will requirevendors to provide this data as part of theproject management and implementationprocess.


4. Deploy a portfolio management system to trackmajor IT projects. Refining the tools support-ing portfolio management is a CIO priority.The focus will be on ensuring the mostappropriate mix of IT Assets to addressDepartmental mission; infrastructurecompatability; and managing to cost. scheduleand performance.

5. Use project metrics to indicate when correctiveactions are required. Treasury will rely onagreed-upon performance measures tracked bythe “Executive Dashboard,” to determinewhen the Department should forceremediation of a project, to terminate it, or toallocate additional funding.

6. Meet OMB IT security performance measures.Treasury’s IT Security Office has initiated anew management process to achieve the highperformance measures expected of the Trea-sury, and will aggressively certify andaccreditate systems.

7. Contribute to, and participate in, government-wide e-Gov initiatives. Treasury will continueto be a significant partner in the Federal E-Gov initiatives, both contributing its experi-ence and expertise and participating in thedevelopment of government-wide initiativeswhen appropriate.

Measuring Success

We will measure the proportion of projects thatoperate within 10 percent of cost and performancetargets. We will track the number of duplicativeand overlapping systems we have eliminated, thepercentage of systems we have certified andaccredited, and the number of government-widee-Gov initiatives we contribute to or participate in.

❖ Integrate Budget Decisions withPerformance Assessment to Ensure Treasuryis Cost Effectively Delivering Results for theAmerican People

The Department of the Treasury has an enormousresponsibility and a diverse portfolio of productsand services. Therefore, we must systematicallyassess the performance of the different programswe are managing for the American people. Wemust clearly identify those that provide a greater orlesser “return on investment,” in terms of cost-effective results, and make our resource allocationsdecisions appropriately.


Treasury has several strategies to further integrateperformance assessment into the budget process:

• Complete Program Assessment Rating Tool(PART) ratings for all programs, and expand useof Treasury’s internal PART-like tool

PART is a tool OMB uses to gauge programperformance. OMB is continuing to selectspecific Treasury programs to be rated usingthis tool. In addition, the Treasury hasdeveloped and uses a PART-like approach toevaluate all its programs. Treasury firstimplemented this tool during the FY 2004performance budget process to evaluatebureaus’ performance budget requests, and isaggressively rolling it out to all programs.

Treasury’s Office of Performance Budgeting isconducting training for the bureaus on how todeveloping strategic and performance goals,measures, and targets that are outcomeoriented and meaningfully reflect the missionof the program. We also provide guidance onOMB’s PART process at monthly Treasury-wide CFO, budget and planning meetings.The Treasury will meet individually with “at-risk” bureaus that need greater assistance withimproving goals and measures and/or integrat-ing budget with performance.


• Make performance measures more focused anduseful to policy makers

Treasury will continue efforts to reduce thenumber of its workload metrics, having inplace the existing and new outcome orientedand efficiency measures that will improvefocus and effectiveness. We will continueaggressively working with our bureaus toestablish high-level, meaningful performancemeasures for each program.

• Require managers at all levels to regularly useperformance measure information whenmaking decisions

Treasury has implemented a reporting systemto track the results of bureaus’ performanceand will continue its initiative to requiremanagers to use monthly performance dataand month-end financial reports to assessTreasury’s progress in achieving its goals anddetect performance issues and trends requiringsenior management intervention.

In addition, Treasury will require seniormanagers to meet quarterly to discuss theirassessments of the financial and performanceinformation and identify issues requiringfurther action. Managers, however, will beaccountable for immediately notifying seniormanagement of significant performance issuesto ensure timely resolution of any issues orproblems.

• Improve ability to accurately report the full cost ofachieving performance goals, and the marginalcost of changing performance goals

Treasury has taken significant steps to restruc-ture its budget office and processes, and willcontinue to build on this initiative to consoli-date strategic planning, budget formulation,and budget execution staff and functionsunder one office. The integration of thesefunctions has significantly improved Treasury’sability to collectively establish a performance-based budget and coordinate the review and

reporting of our financial and performancedata.

To improve Treasury’s accuracy of reportingcosts by program, the Department is pursuingopportunities to expand its existing perfor-mance system to collect and/or link it withTreasury financial data. In addition, Treasuryis working with bureaus to establish costcenters that will collect and consolidatefinancial data by program.

• Incorporate the impact of PART ratings intobudget submissions and justifications, andensure all Treasury programs use PART evalua-tions to direct program improvements

Treasury bureaus must reference PART in justify-ing resources for PARTed programs. Treasury willcontinue to use its PART-like criteria and processto review bureaus performance budget requests.

Treasury’s review process will include rigorousreview of bureaus’ capital investment plans. Inaddition, Treasury’s reviews of bureau perfor-mance and financial data will enable timelydetection of management action and/or legislativeproposals needed to effectively direct programimprovements.

Measuring Success

We will measure:

• The results of programs PARTed by OMB andthe Treasury internal PART-like tool;

• Number of outcome and efficiency performancegoals and measures;

• Number of budget submissions and justificationsthat effectively incorporate performance andbudget data; and

• Accuracy of our ability to report the full andmarginal cost of achieving or changing ourperformance goals.


APPENDICES

A. Crosswalk of Treasury Strategic Goals, Strategic Objectives, and BureauGoals

B. Executive Summaries of Bureau Plans

C. Table of Cross-Cutting Issues and Linkages to Partners

D. Program Evaluations

E. Glossary of Terms and Acronyms

Strategic Plan • Fiscal Years 2003-2008 A1

A. Crosswalk of Treasury Strategic Goals,Strategic Objectives, and Bureau Goals

Economic FocusTreasury Strategic Goal: Promote Prosperous U.S. and World Economies (E1)

Treasury Objective Related Bureau Goals

Stimulate economic growth Community Development Financial Institutions Fund (CDFI)and job creation (E1A) • Improve the economic and living conditions of underserved communities by

providing an array of community development financial services through anationwide network of regulated and nonregulated CDFIs and CDEs.

Departmental Offices (DO)• Promote economic growth world-wide.• Increase free trade and cross-border investment.

Provide a flexible legal Office of the Comptroller of the Currency (OCC)and regulatory • A flexible legal and regulatory framework that enables the national bankingframework (E1B) system to provide a full competitive array of financial services.

Office of Thrift Supervision (OTS)• A flexible legal and regulatory framework that enables the thrift industry to

provide a full competitive array of financial services.

Improve and simplify Departmental Offices (DO)the tax code (E1C) • Reduce the cost of compliance for business and individuals through simplifying,

rationalizing and streamlining the tax code.• Improve the tax code to make is simpler, more economically neutral, fairer, and

more conducive to economic growth.

Treasury Strategic Goal: Promote Stable U.S. and World Economies (E2)

Treasury Objective Related Bureau Goals

Increase citizens’ Alcohol and Tobacco Tax and Trade Bureau (TTB)economic security (E2A) • Prevent consumer deception, ensure that regulated alcohol and tobacco products

comply with Federal commodity, safety, and distribution requirements, andprovide high quality customer service.

Departmental Offices (DO)• Protect personal financial information.• Ensure that Americans have access to financial education programs that help

them obtain practical knowledge and skills to make informed financial choicesthroughout their lives.

Improve the stability of Departmental Offices (DO)the international financial • Ensure responsible stewardship of federal funds invested by internationalsystem (E2B) financial institutions.

Department of the TreasuryA2

Treasury Strategic Goal: Preserve the Integrity of Financial Systems (F3)

Strategic Objectives Related Bureau Goals

Disrupt and dismantle Departmental Offices (DO)financial infrastructure of • Identify, trace and freeze financial assets of terrorists and other financial criminals.terrorists, drug traffickersand other criminals Financial Crimes Enforcement Network (FinCEN)and isolate their support • Collect, analyze, and share information needed to combat the financial aspectsnetworks (F3A) of criminal activity worldwide.

Internal Revenue Service (IRS)• Top quality service to all taxpayers through fair and uniform application of the

law.

Execute the Nation’s Departmental Offices (DO)financial sanctions • Strengthen coordination and cooperation to effectively enforce financialpolicies (F3B) sanctions policies globally.

Increase the reliability Bureau of Engraving and Printing (BEP)of the U.S. financial • Satisfy the Federal Reserve Board and the public by providing responsivesystem (F3C) service and quality products.

• Manufacture state-of the-art currency of consistently high quality while improving productivity and cost performance.• Produce state-of-the-art currency that deters counterfeiting, contributes to public confidence, facilitates daily commerce and extends the useful life of notes in circulation.• Ensure an environment of comprehensive security and accountability for the Bureau’s personnel, facilities and products.

Departmental Offices (DO)• Administer and evaluate the Terrorism Risk Insurance Program.• Implement critical infrastructure protection policies.

U.S. Mint (MINT)• Design, sell and deliver quality products.

Office of the Comptroller of the Currency (OCC)• A safe and sound national banking system.• Fair access to financial services and fair treatment of bank customers.

Office of Thrift Supervision (OTS)• A safe and sound thrift industry.• Fair access to financial services and fair treatment of thrift customers.

Financial Focus

Strategic Plan • Fiscal Years 2003-2008 A3

Treasury Strategic Goal: Manage the U.S. Government’s Finances Effectively (F4)


Collect federal tax Alcohol and Tobacco Trade and Tax Bureau(TTB)revenue when due, • Provide the most effective and efficient system for the collection of all revenue thatthrough a fair and is rightfully due, eliminate or prevent tax evasion and other criminal conduct,uniform application of and provide high quality service while imposing the least regulatory burden.the law (F4A)

Departmental Offices (DO)• Ensure fair administration of the tax code.

Financial Management Service (FMS)• Provide timely collection of Federal Government receipts, at the lowest cost,

through an all-electronic Treasury.• Maximize collection on government delinquent debt by providing efficient and

effective centralized debt collection services.

Internal Revenue Service (IRS)• Top quality service to all taxpayers through fair and uniform application of the law.• Top quality service to each taxpayer in every transaction.

Manage federal debt Bureau of Public Debt (BPD)effectively and efficiently • Effectively finance government operations.(F4B)

Departmental Offices (DO)• Achieve “lowest cost” financing over time.

Financial Management Service (FMS)• Provide timely collection of Federal Government receipts, at the lowest cost,

through an all-electronic Treasury.

Make collections and Financial Management Service (FMS)payments on time and • Provide federal payments in a timely and accurate manner, move toward anaccurately, optimizing use all-electronic Treasury for payments, and determine the optimal paymentof electronic mechanisms processing environment for the future.(F4C) • Provide timely collection of Federal Government receipts, at the lowest cost,

through an all-electronic Treasury.

Optimize cash Bureau of Public Debt (BPD)management and • Effectively account for the debt of the Federal Government.effectively administer thegovernment’s financial Departmental Offices (DO)systems (F4D) • Make accurate, timely financial information on U.S. Government programs

readily available.

Financial Management Service (FMS)• Produce accurate, accessible, and timely government-wide financial information and

reports which contribute to improve quality of the Nation’s financial decision making.• Facilitate the achievement of a clean audit opinion on the Financial Report of the U.S.

Government through FMS’s internal operations and support to government agencies.

Financial Focus

Department of the TreasuryA4

Internal Management Focus

Treasury Strategic Goal: Ensure Professionalism, Excellence, Integrity and Accountability in theManagement and Conduct of the Department of the Treasury (M5)


Protect the integrity of the • Ensure fairness, integrity, independence, objectivity, proficiency, and due care inDepartment of Treasury all functions and responsibilities. Audits, investigations and independent(M5A) oversight are the mechanisms through which Treasury, including the

bureaus, ensure that we operate in an appropriate manner.

Manage Treasury • Strengthen workforce management to provide the leadership capacity, people,resources effectively to tools and technology to ensure a diverse workforce committed to excellence.accomplish the mission • Achieve efficient and effective competition from all sources to achieve ourand provide quality missions in the most cost effective manner.customer service (M5B) • Improve financial performance.

• Expand electronic government.

• Integrate budget decisions with performance assessment to ensure Treasury iscost effectively delivering results for the American People.

Strategic Plan • Fiscal Years 2003-2008 B1

B. Executive Summaries of Bureau Plans

These executive summaries capture the Bureau’s mission, goals, objectives and major programs. Complete bureau plans are available on the bureau web sites.

Alcohol and Tobacco Tax and Trade Bureau (TTB) ...................................... www.ttb.gov

Bureau of Engraving and Printing (BEP) .................................... www.moneyfactory.gov

Bureau of the Public Debt (BPD) ........................................... www.publicdebt.treas.gov

Community Development Financial Institutions (CFDI) ................... www.cdfifund.gov

Financial Crimes Enforcement Network (FinCEN) ............................... www.fincen.gov

Financial Management Service (FMS)................................................ www.fms.treas.gov

Internal Revenue Service (IRS)..................................................................... www.irs.gov

U. S. Mint (Mint) ................................................................................. www.usmint.gov

Office of the Comptroller of the Currency (OCC) ............................. www.occ.treas.gov

Office of Thrift Supervision (OTS) ......................................................www.ots.treas.gov

http://www.ttb.gov

http://www.moneyfactory.gov

http://www.publicdebt.treas.gov

http://www.cdfifund.gov

http://www.fincen.gov

http://www.fms.treas.gov

http://www.irs.gov

http://www.usmint.gov

http://www.occ.treas.gov

http://www.ots.treas.gov

Department of the TreasuryB2

Alcohol and Tobacco Tax and Trade Bureau (TTB)

Mission

TTB’s mission is to collect alcohol, tobacco,firearms and ammunition excise taxes; to ensurethat alcohol beverages are labeled, advertised, andmarketed in accordance with the law; and toadminister the laws and regulations in a mannerthat protects the revenue, protects the consumer,and promotes voluntary compliance.

Overview/Background

The Alcohol and Tobacco Tax and Trade Bureau(TTB) is the newest agency in the Department ofthe Treasury, created when the Homeland SecurityAct of 2002 divided the Bureau of Alcohol,Tobacco and Firearms was into two agencies. TTBwill retain responsibility for administering alcoholand tobacco laws and implementing regulations,as well as the statutes that impose federal excisetax on firearms and ammunition. While theagency has a new name, the history of TTB’sregulatory responsibility dates back to creation ofthe United States Department of the Treasury andthe first federal taxes being levied on distilledspirits in 1791.

Bureau Strategic/General Goals

(Bolded goals are incorporated in the CorporateTreasury Strategic Plan.)

• Collect the Revenue – Provide the mosteffective and efficient system for the collectionof all revenue that is rightfully due, eliminateor prevent tax evasion and other criminalconduct, and provide high quality servicewhile imposing the least regulatory burden

• Protect the Public – Prevent consumerdeception, ensure that regulated alcohol andtobacco products comply with Federal com-modity, safety, and distribution requirements,and provide high quality customer service.

• Refine Management Practices - Ensure that allTTB programs operate at optimum efficiencyand effectiveness and with full accountability, byproviding high quality management andadministrative support.

Bureau Means and Strategies

TTB administers federal tax laws on alcohol,tobacco, firearms, and ammunition. The entitiesthat produce and import the taxable commoditiesregulated by TTB include major contributors tothe U.S. economy. TTB must be responsive totheir customers’ needs by reducing delays andregulations that impede business and do notimprove TTB’s ability to collect the revenue.

TTB enforces federal laws related to the produc-tion and distribution of alcohol and tobaccoproducts through education, inspection, labora-tory testing, and investigation. TTB works withindustry, state governments, and other interestedparties to facilitate compliance with regulatoryrequirements. TTB provides technical expertise,training, information, and research results toindustry members, government agencies, andothers in order to better protect and serve thepublic.

Major Programs

Application Program - Keeping ineligible personsfrom entering the industry is key to TTB’smission. The tobacco and alcohol industries havethe potential to be highly lucrative through illicitactivity in these commodities, and therefore,terrorists and organized crime must be kept out ofthese industries. TTB’s National Revenue Centerreceives over 3,000 original applications forvarious permits annually. To ensure that onlyeligible persons enter into the business, TTBconducts personnel and financial backgroundinvestigations, and inspects the premises to beused for the operations are inspected.

Revenue Collection Program – A field approachthat uses analysis to target non-compliant industrymembers and establishes an identifiable presencewithin industry that encourages voluntary compli-ance is key to collecting revenue that is due (TTBcollects approximately $15 billion annually).TTB is developing several electronic-filingstrategies to enable regulated industry members toconduct business with TTB via the Internet. TTBkeeps industry members and the public informed


on laws and regulations and pending issuesthrough a variety of media, including the Internet,seminars, and surveys.

COLAs Online - TTB enforces the FederalAlcohol Administration Act, which requiresimporters and bottlers of beverage alcohol toobtain certificates of label approval or certificatesof exemption from label approval (COLAs) formost alcoholic beverages prior to introducingthem into interstate commerce. TTB acts on theseCOLAs to ensure that producers lavel products inaccordance with federal laws and regulationsaimed at protecting the consumer. In 2003, TTBlaunched a web-based and entirely paperlesssystem called COLAs Online that gives alcoholindustry members and third party filers the optionto file these applications via the TTB web site.This system will also provide a way for TTB toprocess the application, return approved orrejected COLAs to applicants, and providenotification of approval or rejection electronically.

Alcohol Beverage Sampling Program - TTB collectshundreds of alcohol product samples annuallyfrom the marketplace for laboratory analysis. Thesampling program includes samples collecteddirectly from producers and bottlers. Through thisprogram, we randomly sample products and havediscovered that some products selected and testedare non-compliant for various reasons.

Trade Practices Program – The Federal Alcohol

Administration Act imposes extensive tradepractice requirements on the alcohol beverageindustry. TTB investigates anti-competitivebusiness practices between alcohol beveragesuppliers and retailers to preserve the retailer’seconomic independence and protect the con-sumer.

International Trade Assistance – TTB works withother federal agencies and the Office of theUnited States Trade Representative (USTR) toprovide technical expertise on regulatory issuesinvolving international trade in alcoholic bever-ages and resolve alcohol trade issues by bothmonitoring and facilitating U.S. trade. TTB doesthis by representing the Department of theTreasury in technical discussions with variousinternational trade organizations. Discussionsusually focus on issues of mutual concern to theU.S. and the European Union as well as to otheralcohol producing countries.


The Bureau of Engraving and Printing (BEP)Mission

BEP’s core mission is to design and manufacturehigh quality security documents that meetcustomer’s requirements for quantity, quality, andperformance and deter counterfeiting.

Overview/Background

The Bureau of Engraving and Printing has been inoperation for more than 139 years. Created by anAct of Congress in 1861, the Bureau came intoexistence a year later to print federal papercurrency starting with one dollar and two dollarcurrency notes.

The Federal Reserve is the Bureau’s primarycustomer and, with the phase out of postagestamp production in 2005, will account forapproximately 97 percent of all revenue. Thecurrent manufacturing facilities in Washington,D.C. and Forth Worth, Texas employ approxi-mately 2600 individuals.


(Bolded Goals are included in the Corporate TreasuryStrategic Plan)

• Satisfy the Federal Reserve Board, thePostal Service and the public by providingresponsive service and quality products.

• Manufacture state-of-the-art currency ofconsistently high quality while improvingproductivity and cost performance.

• Produce state-of-the-art currency that deterscounterfeiting, contributes to public confi-dence, facilitates daily commerce, andextends the useful life of notes in circulation.

• Ensure an environment of comprehensivesecurity and accountability for the Bureau’spersonnel, facilities and products.

• Manage the Bureau’s resources to increaseefficiency and effectiveness in support of the otherstrategic goals.


BEP is building and acquiring the resourcesneeded to meet the projected design, quality, andquantity requirements for its products over thenext five years. This includes security and ac-countability, asset management, informationtechnology, and human resources. BEP’s StrategicPlan emphasizes modernizing and streamliningthe Bureau’s infrastructure through facilityrenovations, including the addition of a tour atthe Western Currency Facility, expansion forprocess modification, production equipmentupgrades and replacement, and environmentalcontrol system upgrades, and expansion. TheBureau also has a strategic initiative to ensure thecontinuity of operations of essential functions inthe event of an emergency.

BEP’s Strategic Plan emphasizes two resourceareas critical to success in today’s competitiveenvironment — information technology (IT) andhuman resources (HR). The Bureau will leveragetechnology and employ appropriate governmentand Treasury e-Gov initiatives to increase theefficiency and effectiveness of the Bureau’s pro-duction, financial, and accountability systems andto enhance BEP’s service to our customers andbusiness partners. As a prerequisite for theachievement of all these goals, the Bureau musthave a capable, motivated workforce with theskills required for 21st century manufacturing.The human resources components of the planensure that the Bureau maintains such aworkforce.

Major Programs

Manufacturing

Protection and Accountability of Assets

Resource Management


Bureau of the Public Debt (BPD)Mission

BPD’s mission is to borrow the money needed tooperate the Federal Government and to accountfor the resulting debt.

Overview/Background

The job of Public Debt is large and varied. BPDeffectively regulates the primary and secondaryTreasury securities markets; ensures that reliablesystems and processes are in place for purchasingand transferring Treasury securities; annuallyauctions and issues, $2 trillion of marketablesecurities, issues and redeems more than 100million savings bonds each year; maintains morethan $400 billion in securities accounts directlyfor investors; and provides timely and accurateinformation on the public debt.


(Bolded Goals are incorporated in the CorporateTreasury Strategic Plan)

• Effectively finance government operations

• Effectively account for the debt of theFederal Government

• Fulfill customer expectations


BPD uses the following strategies to achieveBureau Strategic Goals:

• Effectively educate our customers and thesecurities market on the terms, conditions,and risks of Treasury securities.

• Simplify the regulations and procedures thatour customers must follow to conductbusiness with us.

• Make and receive as many of our paymentselectronically as possible.

• Encourage investors to purchase securities,access their accounts, and conduct transac-tions electronically.

• Expand our use of the Internet to inform andcommunicate with customers and allow themto communicate with us.

• Use the Internet to market securities to retailcustomers.

• Establish a single account relationship withour customers for all of our retail securitiesproducts.

• Minimize the impact of high workloadvolumes on our operations and customerservice.

• Deploy technology in support of our opera-tions using an open architecture, emphasizingbusiness process reengineering, and applyingthe principles of rapid application develop-ment.

• Accomplish administrative transactionselectronically.

Major Programs

BPD has five major program areas:

• Wholesale Securities Services

• Government Agency Investment Services

• Retail Securities Services

• Summary Debt Accounting

• Franchising


Community Development Financial Institutions Fund(CDFI)

affordable financial services and financing. If theconditions for prosperity and stability for allAmericans we must address these gaps in financialservice availability.

CDFIs and CDEs are specialized, regulated, andnon-regulated financial service providers whoseprimary mission is to fill credit gaps inunderserved communities. CDFIs and CDEs alsoprovide business counseling, financial education,or other technical assistance that teach borrowersto manage credit responsibly and help counterpredatory lending. In addition to promoting thesustainability of community development finan-cial institutions, the Fund provides incentives totraditional insured depository institutions toinvest in the most underserved communities inthe country.

By supporting the network of financial institu-tions that serve underserved areas, the Fundincreases economic growth and creates jobs,creates a flexible legal and regulatory frameworkfor its certified institutions, and increases thereliability of the U.S. financial system. The CDFIFund is an integral part of Treasury’s strategy forpromoting a prosperous U.S. economy andpreserving the integrity of financial systems.

Vision

The vision of the CDFI Fund is a United States inwhich all people have access to credit, capital, andaffordable financial services.

Mission

The mission of the CDFI Fund is to expand thecapacity of financial institutions to provide credit,capital, and financial services to underservedpopulations and communities in the UnitedStates.

CDFI Fund Strategic Goal:

(Bolded goals are incorporated in the corporateTreasury Strategic Plan.)

• Improve the economic and living conditionsof underserved communities1 by providingan array of community developmentfinancial services through a nationwidenetwork of regulated and non-regulatedCDFIs and CDEs.

The United States has one of the best banking andfinancial market systems in the world. Yet,millions of low-income Americans and countlessdistressed communities are not adequately servedby these systems. They lack convenient access to

(Footnotes)

1 Underserved communities are communities that qualify as CDFI Program Target Markets (which include a specific geogra-phy called an Investment Area, or a specific community of people with demonstrated lack of access to credit, equity orfinancial services called a Low-Income Targeted Population or an Other Targeted Population), New Markets Tax CreditProgram Low-Income Communities, or Bank Enterprise Award Program Underserved Communities. Many American IndianAreas and similar entities qualify as underserved communities. The definition ofAmerican Indian Areas and similar entitiesincludes American Indian Reservations (federal and state), Off-Reservation Trust Lands; Oklahoma Tribal Statistical Areas;Alaska Native Regional Corporations or Village Statistical Areas; and Hawaiian Homelands.


CDFI Fund Major Programs

Community Development Financing Institutions(CDFI) Program

The purpose of the CDFI Program is to improvethe financial position of CDFIs — particularlythose that create community development impactin the most economically distressed areas of thecountry, — increase private sector investment inthese institutions, and promote their institutionaldevelopment. The program accomplishes itspurposes by providing to CDFIs financial assis-tance awards that must be matched $1:$1 by non-federal funds, and by providing technical assis-tance awards and training to CDFIs and CDFIs information.

Bank Enterprise Award (BEA) Program

The BEA program recognizes the key role oftraditional financial institutions in communitydevelopment lending and investing. It providesincentives for these regulated banks and thrifts toinvest in CDFIs and to increase their lending andfinancial services in distressed communities.Providing monetary rewards for communityinvestment activities leverages the Fund’s dollarsand puts more capital to work in distressedcommunities throughout the nation.

New Markets Tax Credit (NMTC) Program

The NMTC Program is designed to spur $2billion of private investments in a range ofprivately managed investment vehicles calledCommunity Development Entities (CDEs).These privately managed investment vehiclesmake loans and equity investments, purchaseloans, or provide financial counseling in low-income communities.


Financial Crimes Enforcement Network (FinCEN)

Mission

FinCEN’s mission is to collect, analyze, and shareinformation needed to combat the financialaspects of criminal activity worldwide.

Overview/Background

The U.S. Department of the Treasury establishedFinCEN in 1990 to provide a government-wide,multi-source intelligence and analytical network.FinCEN’s operation was broadened in 1994 toinclude regulatory responsibilities. In October2001, the USA Patriot Act elevated FinCEN tobureau status and emphasized its role in fightingterrorist financing.

FinCEN works to accomplish its mission in twoways. First, as administrator of the Bank SecrecyAct (BSA), our nation’s comprehensive anti-money laundering statute, FinCEN is responsiblefor expanding the regulatory framework toindustries vulnerable to money laundering,terrorist financing, and other crimes. Second,FinCEN adds value to the BSA data by analyzingand sharing information on money launderingand terrorist financing trends and patterns withlaw enforcement to assist their efforts in combat-ing the financial aspects of criminal investigations.FinCEN seeks to strike a balance between meetinglaw enforcement’s information needs, minimizingthe burden on regulated industry, and protectingindividual privacy.


(Bolded Goals are incorporated in the CorporateTreasury Strategic Plan)

• Collect, analyze and share informationneeded to combat the financial aspects ofcriminal activity worldwide.

• Support efforts to eliminate safe havens formoney laundering and terrorist financingworldwide.

• Modernize the collection, maintenance, andretrieval of BSA information.

• Enhance the value of FinCEN’s analyticalservices and products.

Major Functions:

• Extending the Regulatory Framework

FinCEN is the nation’s central clearinghouse forbroad-based financial intelligence and informationsharing. The BSA authorized Treasury to requirecovered financial institutions to file certain reportsand keep records of certain types of financialtransactions (e.g., suspicious activity reports andcurrency transaction reports). As the administratorof the BSA, FinCEN promulgates regulations,provides outreach and guidance to the regulatedindustries, and initiates regulatory enforcementactions in certain circumstances. FinCEN relieson its federal regulatory partners to examinefinancial institutions within their respectivejurisdictions regarding compliance with the BSA.


• Collecting and Sharing Information

As the administrator of the BSA, FinCEN man-ages the information the regulated industries file.FinCEN relies on the IRS as the primary serviceprovider for the collection, processing, andretrieval of BSA information. FinCEN is workingwith IRS to modernize the systems and processesused to collect, maintain, and access BSA infor-mation. These systems include the new Patriot ActCommunication System (PACS), which allowsfinancial institutions to file BSA reports electroni-cally, and the Gateway process, which providesauthorized law enforcement direct, on-line accessto records filed under the BSA.

• Providing Analytical Services and Products

FinCEN adds value to financial investigations inseveral ways. First, FinCEN provides case supportto U.S. law enforcement at the federal, state, andlocal levels, and to international counterparts, bypreparing reports based on data collected underthe BSA, and other commercial and law enforce-ment information. Second, FinCEN analysts useBSA information and other financial intelligenceto identify trends, patterns, and techniquesassociated with money laundering, terroristfinancing, and other financial crimes, worldwide.Third, under the USA PATRIOT Act, FinCENhas initiated a program that allows law enforce-ment to query financial institutions, throughFinCEN, on money laundering or terrorisminvestigations.


Financial Management Service (FMS)Mission

The mission of the FMS is to provide centralpayment services to federal program agencies,operate the Federal Government’s collections anddeposit systems, provide government wideaccounting and reporting services, and managethe collection of delinquent debt.

Overview/Background

FMS is the Federal Government’s financialmanager and, as such, oversees a daily cash flow inexcess of $50 billion; disburses 85 percent of theFederal Government’s payments, includingincome tax refunds, social security, veterans’benefits, and other federal payments to individu-als; administers the world’s largest collectionsystem which collects over $2.2 trillion annually;provides cash management guidance to federalprogram agencies; gathers and publishes govern-ment-wide financial information used to monitorthe government’s financial status; and, serves asthe government’s central debt collection agencyfor delinquent debt.



• Produce accurate, accessible, and timelygovernment wide financial information andreports that contribute to improved qualityof the Nation’s financial decision making.

• Provide federal payments timely andaccurately, move toward an all-electronicTreasury for payments, and determine theoptimal payment processing environmentfor the future.

• Provide timely collection of Federal Govern-ment receipts, at the lowest cost, through anall-electronic Treasury.

• Facilitate the achievement of a clean auditopinion on the Financial Report of the U.S.Government through FMS’ internal opera-tions and support to government agencies.

• Maximize collection on government delin-quent debt by providing efficient andeffective centralized debt collection services.

• Establish policies and processes to facilitate theintegration of e-commerce technologies intoFMS’ business programs and infrastructure.


FMS’ Strategic Plan emphasizes the importance ofour internal day-to-day operations, which touchthe lives of hundreds of millions of U.S. citizens.FMS recognizes fully its obligation to continu-ously improve the reliability and timeliness of thegovernment’s financial information. FMS willmaintain quality standards for financial services,expand consultative services to agencies in theresolution of issues related to financial accountingand reporting, and provide user-friendly andefficient automated tools to obtain, provide, andprocess information to and from customers andstakeholders. By attending to and managing basicbusiness responsibilities, FMS will have theopportunity to undertake new, challenging, andexciting initiatives in support of the Treasury’soverall management of the Federal Government’sfinances.

The key to FMS achieving long-term goals andobjectives lies in the teamwork, support andcommitment of its most valued resource — thededicated and talented workforce. FMS willprovide a work environment that values training,where employees can maintain the knowledge,skills and abilities needed to accomplish today’sprogram and performance goals and develop thoseneeded to meet the challenges of tomorrow. To


achieve its strategic goals, FMS is pursuing otherstrategies that:

• Provide incentives and reduce barriers foragencies and customers to increase use ofelectronic payments and collections;

• Use sound management practices to oversee ITinvestments and ensure they operate in asecure environment;

• Maximize Internet business activity;

• Provide agencies with easy and secure access toFMS systems and information;

• Increase agencies’ knowledge of financialmanagement and accounting;

• Minimize redundant operations and systems;

• Work collaboratively with federal, state andlocal agencies to identify issues and opportuni-ties to improve financial management;

• Support and fund pilots and prototypes toquickly assess emerging technologies andapproaches and to evaluate the business case;

• Provide incentives and reduce barriers forstakeholders to take action in support ofimproved accounting, cash management anddebt collection;

• Take a leadership role to identify and resolveissues even though responsibility may beshared with other agencies;

• Serve as a model for other federal agencies by

providing good financial management andmaintaining effective internal controls;

• Foster a learning organization with a support-ive work environment where all employees canmaintain the knowledge, skills, and tools tosucceed and are valued and respected for theirshared contributions;

• Recruit and develop talented employees fromdiverse backgrounds to provide all employeeswith challenging work, honest feedback, andopportunities for growth; and,

• Provide timely, useful, and accurate costaccounting data and performance informationto aid in decision making.

Major Programs

• Payments

• Collections

• Debt Collection

• Government-wide accountingand reporting


Internal Revenue Service (IRS)

Mission

IRS’s mission is to provide America’s taxpayers topquality service by helping them understand andmeet their tax responsibilities and by applying thetax law with integrity and fairness to all.

Overview/Background

The IRS deals directly with more Americans thanany other institution, public or private. It also isone of the world’s most efficient tax agencies. In2002, the IRS collected more than $2 trillion inrevenue and processed nearly 227 million taxreturns. It cost taxpayers 45 cents for each $100collected by the IRS. In 2002, the agency alsoassisted nearly 95 million taxpayers who called thetoll-free automated telephone line, wrote letters orvisited one of the more than 400 offices TaxpayerAssistance Centers (TACs) the IRS maintainsnationwide.


(Bolded goals are included in the Corporate TreasuryStrategic Plan)

• Top-quality service to each taxpayer inevery interaction

• Top-quality service to all taxpayers throughfair and uniform application of the law

• Productivity through a quality workenvironment


IRS will use major strategies to achieve progress ontheir strategic goals. The IRS has developed thesestrategies based on senior management’s consider-ation of internal research and analysis, externalstakeholder input; independent inspector generalaudit and oversight; and and General AccountingOffice (GAO) recommendations, and employeeinput on the key trends, issues, and problems that

most affect the IRS. The major strategies providepractical guidance as to how IRS should allocateand focus management to achieve the strategicgoals.

The current IRS Strategic Plan covers the periodfor FY 2000-2005. IRS is updating its StrategicPlan to better align IRS goals with Department ofTreasury’s goals and will have a draft plan bySeptember 30, 2003. This plan will link IRS’increased enforcement of the tax laws with itscurrent high level of customer service. In addition,IRS is in the process of developing more outcomeand efficiency related measures to better assess theachievement of its goals.

The major strategies in the IRS Strategic Plan,FY 2000-2005 are to:

• Address key areas of noncompliance;

• Meet the needs of taxpayers;

• Reduce taxpayer burden;

• Broaden the use of electronic interactions;

• Stabilize traditional compliance activities;

• Deal effectively with the global economy;

• Meet the special needs of the tax-exemptcommunity;

• Recruit, develop, and retain a qualityworkforce;

• Provide high-quality, efficient, and responsiveinformation services and shared supportservices; and

• Promote effective asset and informationstewardship.


Major Programs

The IRS Restructuring and Reform Act of 1998resulted in the IRS reorganizing itself into fourmajor operating divisions, aligned by types oftaxpayers:

• Wage and Investment: This division servesapproximately 116 million taxpayers who fileindividual and joint tax returns.

• Small Business and Self-Employed: Thisdivision serves the approximately 45 millionsmall businesses and self-employed taxpayers.

• Large and Mid-sized Businesses: This divisionserves corporations with assets of more than$10 million.

• Tax Exempt and Government Entities: Thedivision serves employee benefit plans andtaxexempt organizations such as nonprofitcharities and governmental entities.

Other divisions include Appeals, Chief Counsel,Communications and Liaison, and CriminalInvestigation, and the Taxpayer Advocate Service.


The United States Mint (MINT)

Mission

The primary mission of the Mint is to produce anadequate volume of circulating coinage for thenation to conduct its trade and commerce. Inaddition, the Mint produces and markets numis-matic coins and coin products and to safeguard thenation’s silver and gold reserves.

Overview/Background

Since Congress created the United States Mint in1792, it has grown to a world-class metal manufac-turing and marketing enterprise with operations infive states and the District of Columbia. Theagency produced 14.4 billion coins in 2002,fulfilling the Mint’s mission to produce the nation’scirculating coinage for trade and commerce. Today,the Mint also ranks among the most technologi-cally advanced enterprises in the country and is theworld’s 30th largest online retailer.


(Bolded goals are included in teh Corporate TreasuryStragegic Plan.)

• Be a model government agency that matchesworld class business practices.

• Value and communicate with the AmericanPeople.

• Design, sell and deliver quality products.

• Respect and value our co-workers.


The Mint has adopted several strategies to be amodel government agency: streamline processes;maximize investment return through competitivesourcing, financial planning, and integratingbudget and performance; and maximize technol-ogy and systems functionality to achieve strategicgoals and objectives in a cost effective and efficientmanner. To ensure the security of the Mint, we arepursuing innovative threat assessment strategies

and collaborating with other law enforcementagencies.

The Bureau is developing a Mint-wide educationaloutreach program to better communicate with theAmerican people. To achieve our third goal ofdesigning, selling, and delivering quality products,we are going to: expand our customer base byproviding quality products and services thatrespond to our customers’ needs; design costeffective marketing programs; benchmark againstbest-in-business standards for customer service;adopt state-of-the-art manufacturing techniques;and create beautiful designs that depict the diver-sity of America.

Finally, we will continue to respect and value ourcoworkers through the following strategies: requirepersonal accountability at all levels for workforceand workplace safety; strengthen our internalcommunications and ensure project collaborationacross the organization; effectively use the intranet;expand Mint career, training, recruitment, andretention opportunities; and make the Mint alearning organization.

Major Programs

Circulating Coinage: Produce coins to satisfy theneeds of commerce in a cost efficient and safemanner with state of the art manufacturingtechnology and equipment.

Numismatics: Foster the health of numismatics byproducing outstanding products and service,expanding markets, and supporting the long-termvalue of our products, while making a reasonablereturn for the American taxpayer.

Protection: Maintain a highly professional policeforce with the tools and resources to respond tochanging threats in our environment.


The Office of the Comptroller of the Currency (OCC)

Mission

Congress created the OCC to charter nationalbanks, oversee a nationwide system of bankinginstitutions, and assure that national banks are safeand sound, competitive, and profitable, andcapable of serving in the best possible manner thebanking needs of their customers.

Overview/Background

The OCC licenses, regulates, and supervises theNation’s system of federally-chartered banks.Approximately 2150 national banks and 53 federalbranches or agencies of foreign banks operatethrougout the U.S. Although national banksaccount for only 27 percent of the number ofcommercial banks nationwide, they hold 56percent of the total commercial banking assets inthe U.S.



• A safe and sound national banking system.

• Fair access to financial services and fairtreatment of bank customers.

• A flexible legal and regulatory frameworkthat enables the national banking system toprovide a full competitive array of financialservices.

• An expert, highly motivated, and diverseworkforce that makes effective use of OCCresources.


Some of OCC’s key means and strategies are to:

• Assess the effectiveness of problem banksupervision and develop and apply, as needed,

new strategies for addressing and resolvingsupervisory issues and problem banks;

• Achieve effective compliance with the exami-nation schedule requirements of the FederalDeposit Improvement Act;

• Refine the OCC’s analytical processes andtools and expand their use in bank supervisionactivities;

• Conduct examinations to determine compli-ance with the USA Patriot Act;

• Enforce anti-money laundering and antiterror-ism statutory and regulatory requirements;

• Work to further leverage the use of technologyin bank supervision activities and to expandaccessibility and capabilities of the OCC’sNational BankNet;

• Identify new products and services, andemerging risk areas, including those related tooperational and technology-related vulnerabili-ties, and adjust supervisory strategies andactivities as appropriate;

• Support the ability of national banks to beinvolved in community and economic devel-opment activities;

• Take a lead role in addressing predatorylending practices;

• Foster fair treatment of customers of nationalbanks through OCC guidance and supervisoryenforcement actions where appropriate;

• Provide an avenue for customers of nationalbanks to resolve complaints;

• Expand the availability of the “e-Corp”automated application for banks to filelicensing applications electronically;


• Participate in the interagency EconomicGrowth and Regulatory Paperwork ReductionAct project to review regulations for unneces-sary burden; and

• Support continued recognition of the preemp-tive attributes of the national bank charterthrough appropriate opinions, regulations, andparticipation in litigation where warranted.

Major Programs

The OCC organizes its activities around threemajor programs: Supervise, Charter, andRegulate.

The Supervise program consists of those ongoingsupervision and enforcement activities undertakento ensure that each national bank is operating in asafe and sound manner and is complying withapplicable laws, rules, and regulations for the bankand the customers and communities it serves. Thisprogram includes bank examinations and enforce-ment activities; resolution of disputes through theNational Bank Appeals process; ongoing monitor-ing of banks; and analysis of systemic risk andmarket trends in the national banking system orgroups of national banks, the financial servicesindustry, and the economic and regulatory envi-ronment. Bank Secrecy Act/anti-money launder-ing, the scrutiny of accounting practices, integrityof management information systems, businesscontinuity plans, and off-balance sheet activitieswill be prominent issues we will address in thesupervision of national banks.

The Charter program involves those ongoingactivities that result in the chartering or liquidationof national banks as well as the evaluation of thepermissibility of structures and activities ofnational banks and their subsidiaries. This includesthe review and approval of new national bankcharters, mergers, acquisitions, conversions,business combinations, corporate reorganizations,changes in control, operating subsidiaries,branches, relocations, and subordinated debtissues.

The Regulate program consists of those ongoingactivities that result in the establishment ofregulations, policies, operating guidance, andinterpretations of general applicability to nationalbanks. These regulations, policies, and interpreta-tions may establish system-wide standards, defineacceptable banking practices, provide guidance onrisks and responsibilities facing national banks, orprohibit (or restrict) banking practices deemed tobe imprudent or unsafe. This program also in-cludes the establishment of examination policies,handbooks, and interpretations for examiners.


Office of Thrift Supervision (OTS)

Mission

OTS’s mission is to supervise savings associationsand their holding companies in order to maintaintheir safety and soundness and compliance withconsumer laws and to encourage a competitiveindustry that meets America’s financial servicesneeds.

Overview/Background

OTS dedicates over 85 percent of its resources andrevenues to examine and supervise savings associa-tions and their holding companies to ensure thatthey remain safe, protect consumers, and promotecompetitiveness. The financial condition of thethrift industry is strong. As of March 2003, 958thrifts were in existence with more than $1 trillionof assets. Over 99 percent of the industry was wellcapitalized, and no thrift was less than adequatelycapitalized. A strong economy, a generally hospi-table interest rate environment, sound lending andinvestment practices, and effective regulation,including strengthened capital standards, aidedthis strong performance. Thrifts reported recordearnings and capital for 2002.


(Bolded goals are incorporated in the CorporateTreasury Strategic Plan)

• A safe and sound thrift industry.

• A flexible legal and regulatory frameworkthat enables the thrift industry to provide afull competitive array of financial services.

• Fair access to financial services and fairtreatment of thrift customers.

• A professional and motivated workforce thatprovides exceptional service to its customers andsupports achievement of OTS business goals.


Through examinations, OTS assesses the financialcondition and risk profile of thrift institutions andidentifies violations of law and regulation andpotential financial and economic problems. Tocombat fraud, money laundering, and financialcrimes, OTS reviews thrifts during exams forcompliance with the requirements of the BankSecrecy Act, the USA Patriot Act, and other anti-money laundering laws. Examinations help toprevent development or continuation of unsafeoperating practices and to resolve problems orweaknesses timely, including those related toconsumer protection and the Community Rein-vestment Act (CRA). To improve the stability ofthe international financial system, OTS partici-pates in matters before the Basel Committee forBanking Supervision.

Major Programs

OTS’s single program is to supervise the thriftindustry.

Strategic Plan • Fiscal Years 2003-2008 C1

C. Table of Cross-Cutting Issues, and Linkagesto Partners

Treasury depends on other federal agencies and private partners for information, data, guidance andsupport to accomplish its mission and achieve desired results.

Economic Financial Management

Promote Promote Preserve Manage the Ensure Professionalism,prosperous Stable U.S. the Integ- Government’s Excellence, Integrity,U.S. and and World rity of Finances and AccountabilityWorld Economies Financial Effectively in the ManagementEconomies Systems and Conduct of the

Department of Treasury

Central Intelligence Agency X

Civilian Agency AcquisitionCouncil

Commodity Futures TradingCommission X

Department of Agriculture X

Department of Commerce X X

Department of Defense X X

Department of Interior X

Department of Justice X X

Department of Labor X X X

Department of State X X X X

Department of Transportation X

Department of Health &Human Services X X

Department of HomelandSecurity X

Department of Housing &Urban Development X X

Elect. Processes InitiativeComm.

Environmental ProtectionAgency X

Export-Import Bank X

Federal Chief InformationOfficers Council X

Federal Credit PolicyWorking Group X X

Department of the TreasuryC2

Economic Financial Management

Promote Promote Preserve Manage the Ensure Professionalism,prosperous Stable U.S. the Integ- Government’s Excellence, Integrity,U.S. and and World rity of Finances and AccountabilityWorld Economies Financial Effectively in the ManagementEconomies Systems and Conduct of the

Department of Treasury

Federal Deposit InsuranceCorp. X

Federal Housing FinanceBoard X

Federal Reserve X X X X

General ServicesAdministration X X

Govt. Chief Fin. OfficersCouncil X

Joint Financial ManagementImprovement Program X X

National Security Council X

Office of National DrugControl Policy X

Office of PersonnelManagement X

Overseas Private InvestmentCorp. X

Pension Benefit GuarantyCorp. X

President’s Working Groups X

Procurement ExecutiveCommittee X

Securities & ExchangeCommission X X X

Securities Technical Institute X

Small Business Administration X X

U.S. Trade Representative X

Strategic Plan • Fiscal Years 2003-2008 D1

D. Program Evaluations

Major programs continuously assess progress through systematic program reviews and evaluations. A listof program evaluations is provided below. The list is not intended to capture each and every programevaluation. However, the major program evaluations conducted in the Bureaus are represented below.

Program/Initiative Evaluation

BEP Manufacturing Internal reviews, ISO Quality Audits

Protection and Accountability of Assets Internal reviews, U.S. Secret ServiceReviews Independent Auditor(Ernst & Young)

Resource Management Independent Auditor (Ernst & Young)

BPD Wholesale Securities Services Internal reviews, Internal BPD and FRBevaluations and periodic inspectorgeneral audits

Government Agency Investment Services Internal reviews, periodic an inspectorgeneral audits and an annual inspectorgeneral/IPA financial statement audit

Retail Securities Services Internal reviews, Internal evaluationsand periodic inspector general audits

Summary Debt Accounting Internal reviews, and an annual GAO/IPA audit of financial statements andelectronic data processing systems

Franchising Internal reviews, periodic inspectorgeneral and OPM audits and annualinspector general and IPA audits andreviews

CDFI CDFI Fund Program An inspector general or an independentcontractor will evaluate the effectiveness ofthe CDFI Program

New Markets Tax Credits Multi-year evaluation of programeffectiveness by GAO

Bank Enterprise Awards (BEA) An inspector general or independentcontractor evaluates the effectiveness of theBEA Program.

FinCEN Regulatory Framework - Options to reduce FinCEN will chair a public-private workinglow value currency transaction reports group to identify workable mechanisms, in

partnership with the regulated industry, toachieve the desired 30 percent reduction inCTR filings.

Department of the TreasuryD2

FinCEN Analytical Services and Products - Investigative A work process review will be completed inCase Support Work Processes FY 2004 in the anticipation of the

development of an electronic managementsystem. FinCEN is currently following upon that effort with a detailed requirementsanalysis that will be the basis formodernized case and product tracking system.

Customer Satisfaction Conduct customer satisfaction surveys oninvestigative case reports and regulatorysupport annually.

Employee Satisfaction Follow-up on baseline employee satisfactionsurvey conducted in 2001. Conduct afollow up survey in 2003.

Internal Control Reviews of credit cards Conduct a follow-up review on the controlsand other vulnerable areas over credit cards, acquisition processes, and

other identified areas.

Program Reviews Review at least one program annually toidentify areas that may need improvementto improve the efficiency and effectivenessof the delivery of its programs. Generally,these will be team efforts includingmembers of the program.

FMS Computer Security/All Programs Entity-wide security program to addressweaknesses in computer security planningand management as identified by GAO.

Self-Assessments & Certification/ NIST Self-Assessments andAccreditation/All Programs Certification/Accreditation Reviews of

C&A documents by FMS IT SecurityOversight & Compliance Staff and C&Afacilitators. Review of the FMS IT SecurityProgram by the Treasury Enterprise ITSecurity Planning and Assurance Staff.

Effective Cash Controls Audit of Financial Management Service’sFiscal Years 2002 and 2001.Schedules of Non-Entity Government-wideCash

Improved Financial Information/ Management Letter for Fiscal Year 2002Government-wide Reporting and Accounting Audit of Schedule of Non-Entity Assets,

Non-Entity Cost and Custodial Revenue


FMS Program Review/All Programs Determined optimum organizationalstructure for development of web-basedsystems under the government widecommerce initiative.

IT Internal Controls/All Programs - IT specialist, security specialists andPhysical and Environmental IT Reviews program office representatives conduct

reviews to determine the adequacy ofinternal controls related to IT and physicalsecurities at the various FMS sites andservicing banks that act as our financial agents.

Checks Outstanding Reconciliation Independent assessment by a publicProcedures Assessment accounting firm to determine whether

system reconciliation procedures wereadequate and controls were in place tocorrectly identify the amount ofoutstanding checks. Maintenance of anindependent audit trail.

Program Analysis/Debt Collection Use of Program Assessment Rating Toolthen all remaining programs (PART)

IRS Tax Law Complexity Annual Report of the National TaxpayerAdvocate to Congress listing thetop problems taxpayers face in complyingwith their tax obligations as well as a list ofsuggested legislative changes to correctissues driven by specific tax code sections.

Taxpayer Burden IRS National Research Programmeasures voluntary compliance andidentifies ways of reducing the burden ofcompliant taxpayers. The National TaxpayerAdvocate’s Annual Report to Congress liststhe most significant problems taxpayers facein meeting their obligations and makessuggestions for IRS to implementimprovements.

Customer Satisfaction As required by RRA 98, IRS monitors thesatisfaction of taxpayers.

Tax Law Compliance The IRS National Research Programmeasures voluntary compliance: FilingCompliance – percent of returns timelyfiled, Payment Compliance – percent of taxtimely paid, and Reporting Compliance –accuracy of timely filed tax returns.(Ongoing)

Employee Satisfaction Annual through a Servicewide survey of allemployees (includes the GallupQ12 and internally developed questions).


Mint Benchmarking manufacturing performance New initiative being spearheaded by theDirector of the United States Mint withinthe International Mint Director communityto begin a forum for discussion of issues attheir annual conference. Informalbenchmarking on several differentproduction-related issues with private sector.

Customer Service Independent survey to assess customersatisfaction with Mint numismatic productsand services.

World class administration and cost containment Mint’s Office of Management Serviceswill independently review Mint programs,major initiatives, and finance functions,including review of standard operatingprocedures, policies and internal management controls.

Program performance Partnering with universities or contractorsto evaluate Mint programs is planned forFY 2003 - FY 2008.

OCC Supervise Program The Office of the Ombudsman: TheOmbudsman, through its administration ofthe National Bank appeals process, thecustomer assistance program, and ongoingexamination questionnaires, providesfeedback on the quality of OCCsupervision. Program evaluation activitiesare continuous.

Quality Assurance Program: The OCC’squality assurance (QA) program is designedto ensure that the objectives for banksupervision are achieved.

The Office of the Ombudsman: TheSupervise Program Management Unit ofManagement Accountability Divisioncoordinates the programs.

An inspector general conducts reviews ofvarious aspects of OCC operations everyyear and also conducts material loss reviewsdue to bank failures. The schedule ofreviews is issued each year.

General Accounting Office (GAO) conductstargeted reviews of OCC regulation andsupervision of national banks. The scheduleof reviews is issued each year.


OCC Supervise Program The OCC was included in the first twentypercent of federal programs reviewed duringFiscal Year 2002 by OMB and was evaluatedas “on program”.

Charter Program Licensing Customer Satisfaction FeedbackProgram: Customer feedback on thelicensing process is analyzed for enhancingprogram delivery on a continuous basis.

Inspector general and GAO as previouslydescribed.

Regulate Program Inspector general and GAO as previouslydescribed.

Resource Management Program Analysis Unit: The ProgramAnalysis Unit (PAU) is responsible foranalyzing the major components of theOCC’s organization and programs torecommend ways to ensure more efficientuse of OCC resources. Annually, theComptroller and PAU determine thespecific reviews to be conducted.

Management Accountability Program: TheManagement Accountability Program(MAP) is an ongoing initiative with theprimary objective of ensuring a soundsystem of internal controls at all levels of theorganization. Key MAP elements includeProgram Analysis Unit: The Programan annual risk assessment, a control-testingprogram, and an executive managementcertification program.

Inspector General and GAO as previouslydescribed.

Independent Public Accountant: Everyyear, the OCC commissions the services ofan accounting firm to conduct a financialstatement opinion audit and to provide anassessment of the OCC’s program offinancial controls.

OTS Mandatory Audit Firm Rotation Section 207 of the Sarbanes-Oxley Act of2002 (Public Law 107-204): U.S. GeneralAccounting Office will conduct a study onthe potential effects of mandatory rotationof registered public accounting firms.


OTS Bank Secrecy Act Examinations An inspector general is evaluating theeffectiveness of OTS’s BankSecrecy Act examinations, including itsefforts to detect money-laundering activities.

Financial Statement An independent certified public accountingfirm performs an annual financial statementaudit.

TTB TTB is a new bureau, created earlier thisyear when Treasury’s Bureau of Alcohol,Tobacco and Firearms was divided into twoagencies. TTB has not yet established aformal internal program review process.Once it does so, all of these programs willbe reviewed and evaluated periodically.

TTB plans to contract out for a completeprocess review and reengineering of themajor programs, in particular theApplication Program and the RevenueCollection Program processes at ourNational Revenue Center.

An inspector general plans to evaluatespecific activities in TTB’s RevenueCollection Program.

Strategic Plan • Fiscal Years 2003-2008 E1

E. Glossary of Terms and Acronyms

ACH – Automated Clearing House

ASAP – Automated Standard Application for Payments

ATF - Alcohol, Tobacco and Firearms: A Bureau within Treasury before the Creation of the Depart-ment of Homeland Security. Some of its functions were divested to the Department of Justice; thefunctions that remained within Treasury comprise the Alcohol and Tobacco Tax and Trade Bureau(TTB).

ATTF – Anti-Terrorism Task Force: part of the U.S. Attorney’s Office

BSA – Bank Secrecy Act: authorizes the Treasury Department to require financial institutions tomaintain records of personal financial transactions that “have a high degree of usefulness in criminal, taxand regulatory investigations and proceedings.” It also authorizes the Treasury Department to require anyfinancial institution to report any “suspicious transaction relevant to a possible violation of law orregulation.”

BIT – Bilateral Investment Treaty: universally accepted instrument for the promotion and legalprotection of foreign investments.

BEP - Bureau of Engraving and Printing: designs and manufactures U.S. currency, many stamps,securities, and other official certificates and awards.

BPD - Bureau of the Public Debt: borrows the money needed to operate the Federal Government andaccounts for the Public Debt. It administers the public debt by issuing and servicing U.S. Treasurymarketable savings and special securities.

CAMELS: Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, Sensitivity to Marketrisk used to evaluate bank programs.

CDE -Community development entities: organizations that serve and maintain accountability to low-income communities and their residents. They are often administered locally, and have the goal ofimproving the economic prosperity and standard of living in their community.

CDFI -Community Development Financial Institutions Fund: expands the availability of credit,investment capital, and financial services in distressed urban and rural communities.

CIRB – Capital Investment Review Board

COLA – Certificate of Label Approval: issued by TTB in accordance with the Federal Alcohol Admin-istration Act which requires importers and bottlers of beverage alcohol to obtain certificates of labelapproval or certificates of exemption from label approval for most alcoholic beverages prior to theirintroduction into interstate commerce.

DO - Departmental Offices: The offices within Treasury primarily responsible for the formulation ofpolicy (as distinct from the Bureaus, that are primarily operational).

DHS – Department of Homeland Security

DOJ – Department of Justice

EFT – Electronic Funds Transfer

Department of the TreasuryE2

EFTPS - Electronic Federal Tax Payment System: a free service offered by the U.S. Department of theTreasury to help business and individual taxpayers conveniently pay all their federal taxes electronically.

EOTFFC – Executive Office of Terrorist Financing and Financial Crimes: part of Treasury’s Depart-mental Offices leading the effort to stop the flow of money to terrorists and terrorists’ organizations.

ETA – Electronic Transfer Accounts

EVMS – Earned Value Management System

FATF – Financial Action Task Force: an inter-governmental body whose purpose is the developmentand promotion of policies, both at national and international levels, to combat money laundering. TheTask Force is a “policy-making body” that works to generate the necessary political will to bring aboutnational legislative and regulatory reforms to combat money laundering.

FBI – Federal Bureau of Investigation

FBICC – Financial Banking and Infrastructure Information Committee: facilitates federal efforts toimprove the reliability and security of the U.S. financial system.

FDIC – Federal Deposit Insurance Corporation

FinCEN - Financial Crimes Enforcement Network): is responsible for collecting, analyzing andsharing information needed to combat the financial aspects of criminal activity worldwide.

FMS - Financial Management Service: provides central payment services to Federal program agencies,operates the Federal Government’s collections and deposit systems, provides government-wide account-ing and reporting services, and manages the collection of delinquent debt.

FPA – Federal Program Agencies

FTO - Foreign terrorist organizations: A designation of the U.S. Government that identifies a foreignentity as a terrorist organization.

FTAA - Free Trade Area of the Americas: A proposed free trade area incorporating all the nations in theAmericas.

GAO – Government Accounting Office

GDP – Gross Domestic Product

HIFCA – High Risk Money Laundering and Related Financial Crime Areas

IRS - Internal Revenue Service: Treasury’s bureaus responsible for determining, assessing, and collect-ing internal revenue in the United States.

IRS-CI - Internal Revenue Service: investigates potential criminal violations of the Internal RevenueCode and related financial crimes in a manner that fosters confidence in the tax system and compliancewith the law.

IEEPA - International Emergency Economic Powers Act: a part of Presidential authority upon whichOFAC relies to administer economic sanctions and embargo programs directed primarily against specificforeign countries and individuals posing a threat to the national security, foreign policy, and economy ofthe United States.

Strategic Plan • Fiscal Years 2003-2008 E3

IFI - International financial institutions: Institutions owned and funded by governments, chargedwith a variety of tasks related to the international financial and economic system, including promotinggrowth and maintaining stability. Examples include the International Monetary Fund, and the WorldBank.

IMF - International Monetary Fund: an international organization of 184 member countries. Itpromotes international monetary cooperation, exchange stability, and orderly exchange arrangements;fosters economic growth and high levels of employment; and provides temporary financial assistance tocountries to help ease balance of payments adjustment.

JFMIP – Joint Financial Management Improvement Program: a cooperative undertaking of the U.S.Department of Treasury, GAO, OMB and OPM working in cooperation with each other and otheragencies to improve financial management practices in government.

JTTF – Joint Terrorism Task Force: part of the FBI

MCA - Millennium Challenge Account: U.S. Government developed initiative focuses on channelingfunds to countries that follow pro- growth policies and on structuring our bilateral contributions tocreate incentives for specific measurable results. MCA operates on the principle that aid is more likely topromote economic growth and raise living standards in counties that are pursuing the sound political,economic and social reforms necessary for development to occur.

MCC – Millennium Challenge Corporation: a small government corporation, administering theMCA and designed to support innovative strategies and to ensure accountability for measurable results.

MDB - Multilateral development banks: lending institutions with many member governments.Members are either donors that provide investment capital or poorer, developing countries that borrowfrom MDB’s. MDB’s are charged with increasing growth and raising living standards in the developingand emerging markets.

Mint - U.S. Mint: designs and manufactures domestic, numismatic and bullion coins as well as com-memorative medals and other numismatic items. The Mint distributes U.S. coins to the Federal Reservebanks and maintains physical custody and protection of our nation’s silver and gold assets.

NMLS – National Money Laundering Strategy

NCUA – National Credit Union Administration

NSC – National Security Council

OCC - Office of the Comptroller of the Currency: charters, regulates, and supervises national banks toensure a safe, sound, and competitive banking system that supports the citizens, communities, andeconomy of the United States.

OFAC - Office of Foreign Assets Control: administers economic sanctions and embargo programsagainst specific foreign countries or groups to further U.S. foreign policy and national security objectives.

OMB – Office of Management and Budget

OTS - Office of Thrift Supervision: the primary regulator of all federal and many state-chartered thriftinstitutions, which include savings banks and savings and loan associations.

Department of the TreasuryE4

PART - Program Assessment Rating Tool: a systematic, consistent process for developing programperformance ratings and then using that information to make budget decisions. Developed by OMB, thePART is composed of assessment criteria on program performance and management. The PART estab-lishes a high, “good government” standard of performance and will be used to rate programs in an open,public fashion.

PCC – Policy Coordinating Committee: part of the National Security Committee

PMA - President’s Management Agenda: a strategy for improving the management of the Federalgovernment. It focuses on five areas of management weakness across the government where improve-ments and the most progress can be made. Those areas are: Strategic Management of Human Capital,Budget and Performance Integration, Competitive Sourcing, Expanded E-government, and ImprovedFinancial Management.

PRS – Performance Reporting System: an internal reporting system capturing data on a regular basis toinform management of trends, progress, and concerns in major program areas. The PRS provides dataand information on which the Annual Performance and Accountability Report is based.

SDGT - Specially designated global terrorist: individual designated by by the President, the Secretaryof the Treasury, or the Secretary of State as being involved in terrorist activities.

SDN - Specially designated national: an individual group or entity identified by the President or theSecretary of the Treasury that is acting for or on behalf of, countries targeted for U.S. financial andeconomic sanctions. SDNs are also individuals, groups, and entities, such as terrorists and narcoticstraffickers designated under programs that are not country-specific. Their assets are blocked and U.S.persons are generally prohibited from dealing with them.

SDNTK - Specially designated narcotics kingpin/SDNT- Specially designated narcotics trafficker:individual designated by the Secretary of the Treasury as being significantly involved in narcoticstrafficking.

TELP – Treasury Executive Leadership Program Competency based program focuses on leadership,building relationaships across the Department, stengthening communications, and creating new perspec-tives on mission and customers.

TIRB – Treasury Investment Review Board

TRIP – Terrorism Risk Insurance Program: a temporary Federal program that provides for a transpar-ent system of shared public and private compensation for insured losses resulting from acts of terrorism.

TTB - Alcohol and Tobacco Tax and Trade Bureau: is responsible for enforcing and administering lawscovering the production, use, and distribution of alcohol and tobacco products. TTB also collects excisetaxes for firearms and ammunition.

TWEA - Trading With the Enemy Act: a part of Presidential authority upon which OFAC relies toadminister economic sanctions and embargo programs against specific foreign countries.

USSS – United States Secret Service: a bureau in the Department of Homeland Security; formerly partof the Department of the Treasury.

WTO - World Trade Organization: the only global international organization dealing with the rules oftrade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of theworld’s trading nations and ratified by their parliaments.

strategic plan into/toc2-8/27

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