Reduced or Withheld Federal Payments (Offsets) Must Be Reported to the General Accounting Office

This is a notification to State of Arizona agencies. There is a possibility offsets to federal payments and grant draws may affect state agencies in the upcoming weeks.

Offsetting is the process the federal government uses to withhold federal payments and grant draws to recover unpaid debts owed to the federal government. The federal government identifies debts by taxpayer identification number (TIN). The collection method is generally to reduce the next federal payment in line for the TIN, regardless of which state agency owes the debt.

The General Accounting Office (GAO) was notified that a group of debts has been referred to the U.S. Department of the Treasury for offset. The GAO expects to be able to refund agencies impacted by these offsets. However, in order to be refunded, impacted agencies must provide proof of offset to [email protected]. Agencies will not be refunded if they cannot provide proof that they were offset.

Agencies should not expect to receive a notice that they have been offset. Payments received simply result in being a reduced amount. It is important for agencies to document cases where a federal payment received was less than expected. Do not adjust the deposits to match the amount received without providing the documentation that the amount received was less than requested.

If an agency determines that a federal payment received was less than expected, or was not received at all, contact [email protected] as soon as possible and provide proof of the offset. The best proof of offset is wire documentation for the payment. However, any documentation that helps prove an offset (e.g., draw request documentation, communication received, etc.) should be provided to the GAO. Agencies are also encouraged to attach the documentation to the AZ360 deposit transaction for any reduced deposits.

As a reminder, the U.S. Department of the Treasury’s Treasury Offset Program is not authorized to communicate with anyone other than the GAO. Send any communications regarding offsets or federal debts to [email protected] immediately.

Federal and Cost Accounting Team