Questions concerning this policy chapter should be directed to:

• Veterans Health Administration
• Veterans Benefits Administration
• National Cemetery Administration
• Debt Management Center
• Financial Services Center
• Construction and Facilities Management
• All others

0701 Overview

This chapter establishes the Department of Veterans Affairs’ (VA) financial policies regarding refunds of money previously collected by the agency.

Key points covered in this chapter:

• VA will comply with Treasury Financial Manual (TFM) Volume I, Part 6, Chapter 3000, Payments of Unclaimed Moneys and Refund of Moneys Erroneously Received and Covered, when issuing refunds of collected money.
• VA will charge a valid refund claim to the appropriate appropriation account; and
• VA will only use Treasury’s account, Refund of Moneys Erroneously Received and Covered (020X1807) when collections were deposited with Treasury as miscellaneous receipts, such as interest charges collected on debts as these collections represent receipts that were not properly chargeable to any VA appropriation.

0702 Revisions

See changelog.

0703 Definitions

Classification, Transactions and Accountability (CTA) – Federal Program Agencies use the Classification, Transactions, and Accountability Module within the Central Accounting Reporting System to reclassify or correct their accounting activity which serves as a basis of the Department of the Treasury’s publications to Congress and the public regarding federal revenues and expenditures.

Refund – The return of funds improperly collected or collected in excess of the amount owed.

Third Party Payer – An entity (other than the patient or the health care provider) that reimburses and manages health care expenses. These include insurance companies, governmental agencies, and employers.

Treasury Account Symbol (TAS) – An identification code assigned by the Department of the Treasury. TAS represents individual appropriation, receipt, and other fund accounts.

Treasury Secure Payment System (SPS) – Allows Federal Program Agencies (FPAs) the ability to create and certify payment schedules while maintaining strictly enforced separation of duties.

0704 Roles and Responsibilities

Under Secretaries, Assistant Secretaries, Other Key Officials, and Financial Officials, are responsible for ensuring compliance with the policies set forth in this chapter.

Office of General Counsel (OGC) is responsible for providing legal counsel to resolve disputes in refund requests that cannot be resolved locally.

Finance Offices are responsible for certifying the payment of approved refunds from the correct appropriation account.

Financial Services Center (FSC) is responsible for certification of all payments from Treasury’s Secure Payment System (SPS) and for entering information in the CTA module of CARS. The certification is at a summary Treasury Account Symbol (TAS) level and will include payments from Treasury Account 020X1807.

0705 Policies

070501 General Policies

1. VA will issue refunds in accordance with:
   • 31 U.S.C. § 1322,
   • TFM Volume 1, Part 6, Chapter 3000, and
   • Government Accountability Office’s Principles of Federal Appropriations Law, Third Edition Volume II.
2. VA will automatically refund overpayments in excess of $25. Overpayments less than $25 should only be refunded upon receipt of a valid refund request, unless an automated refund processes for all overpayments (including those less than $25) exists.
3. VA will review uninvested trust, revolving, and deposit fund accounts quarterly to determine whether unclaimed moneys are being held that should be refunded. VA will adhere to guidance contained in VA Financial Policy Volume II, Chapter 2J, Unclaimed Moneys and TFM Volume 1, Part 6, Chapter 3000 for unclaimed moneys.

070502 Processing Refund Requests

1. Situations which may result in a refund include, but are not limited to:
   • Discovery of a Veteran’s retro-active service-connected disability;
   • Third-Party Payer overpayment;
   • Refunds of Treasury Offset Program (TOP) fees charged to the Veteran;
   • Granting of financial hardship on a debt collection effort;
   • Discovering a housing funding fee that a Veteran paid prior to being approved for a service-connected disability; or
   • Identifying a payment made after a debt was offset from another source.
2. VA will process refund requests within 45 days of receipt.
3. Duties related to the processing of refund requests will be properly segregated. Specifically, refund requests must be prepared, reviewed and approved by separate individuals.
4. When a refund request is received, a review will be conducted to determine the validity of the request and to ensure that the appropriate account is indicated for payment of the refund. Appendix A, VHA Medical Care Collections Fund (MCCF) Refund, contains sample guidance.
5. Refunds will be assigned a second level reviewer to review refund requests prior to submitting for approval.
6. When the second level review is complete, refund requests will be submitted to the finance office for approval.
7. The approving official in the finance office processing the refund must ensure the validity, accuracy, and legality of the refund.
8. The finance office processing the refund request will notify the office that submitted the request when the refund is paid or denied.
9. FSC will certify payments from Treasury’s Secure Payment System (SPS) at the summary TAS level on a daily basis, including payments refunded from Treasury Account 020X1807, Refund of Moneys Erroneously Received and Covered (Indefinite).
10. The Office of General Counsel (OGC) is to be consulted, as necessary, in disputes over refunds which cannot be resolved locally.

070503 Accounting for Refunds

1. VA will charge a valid refund request to the appropriation account where the deposit was initially credited unless the appropriation account is closed. If the appropriation account is closed the refund may be made in accordance with 31 U.S.C. § 1553, from a current year appropriation that was established for the same purpose.
2. In accordance with 31 U.S.C. §1322, VA will charge a valid refund claim to Treasury’s General Fund Account 020X1807, Refund of Moneys Erroneously Received and Covered (Indefinite) for receipts erroneously deposited into Treasury when it cannot be properly charged to any other appropriation.
3. When issuing refunds from account 020X1807, FSC will certify the payments and report them in the Classifications, Transactions, and Accountability (CTA) module of CARS.
4. Prior to issuing a refund of $100,000 or more from account 020X1807, written documentation must be provided to Treasury documenting the reason for the refund. FSC will coordinate with the appropriate office to ensure adequate documentation is provided in a timely manner.
5. If VA erroneously collects moneys from a payor and deposits those funds to a miscellaneous receipts account, but a court or other decisional body subsequently determines that the funds should not have been collected from the payor and orders VA to refund the amounts collected, 020X1807 can be utilized for the refund only if the refund cannot be properly chargeable to another appropriation. See the Government Accountability Office’s Red Book, which provides guidance regarding refund of moneys erroneously received.
6. If VA has statutory authority to retain collections, but erroneously deposited collections into a miscellaneous receipts account, VA should reverse the transaction by debiting miscellaneous receipts and crediting its statutorily authorized account.
7. The debiting of miscellaneous receipts may require a backdated transaction to the applicable prior year. If so, VA must coordinate with the Office of Management and Budget for proper guidance. Refer to the Treasury Financial Manual Bulletin Using the Prior-Year Adjustment Attribute Required by the Governmentwide Treasury Account Symbol Adjusted Trial Balance System (GTAS) for Reporting, Submitting, and Tracking Treasury Backdated Documents.
8. Interest and administrative charges related to a refund will be paid from Treasury Account 020X1807.
9. In accordance with TFM Volume 1 Part 6 Ch 3000, Section 3065: “Fiscal Service may, from time to time, request reports on transactions or balances pertaining to account 020X1807.” VA will comply with requests for data from Treasury’s Fiscal Service.

070504 Record Retention

1. All documentation related to the refund of money collected will be retained in accordance with the National Archives and Records Administration (NARA) General Record Schedule.
2. VA will comply with Treasury’s requirements to maintain adequate records in support of the use of Treasury Account 020X1807. Specifically, VA will:
   • Maintain a memorandum account for 020X1807;
   • Maintain a file of paid disbursement voucher forms with supporting documents for payments made from 020X1807; and
   • Make records available to internal auditors and auditors conducting on-site audits for the Government Accountability Office (GAO).

0706 Authorities and References

• 31 U.S.C. § 1322, Payments of Unclaimed Trust Fund Amounts and Refund of Amounts Erroneously Deposited
• 31 U.S.C. § 1553, Availability of Appropriation Accounts to Pay Obligations
• Government Accountability Office’s Principles of Federal Appropriations Law, Third Edition Volume II
• Standard Form 1047, Public Voucher for Refunds
• Treasury Financial Manual, Volume I, Part 6, Chapter 3000, Payment of Unclaimed Moneys and Refund of Moneys Erroneously Received and Covered
• VA Financial Policy
  • Volume II, Chapter 2D, General Fund Receipt Account
  • Volume II, Chapter 2J, Unclaimed Moneys
  • Volume II, Chapter 7F, Refunds and Rebates
  • Volume V, Chapter 1, Recognition and Accounting for Assets
  • Volume V, Chapter 6, Accounts and Interest Receivables

0707 Rescissions

VA Financial Policy, Volume II Chapter 7G, Refunds Issued by VA, April 2019.

0708 Questions

Questions concerning these financial policies and procedures should be directed to the points of contact: