DoD 7000.14-R, Volume 5, Chapter 4

Do» Financial Manaeement Reeulation

Volume 5. Chapter 4
* January 2004
CHAPTER 4

CHECK CASHING SERVICE (ACCOMMODATIONEXCHANGE)
040]

EXCHANGE OF CASH FOR NEGOTIABLE INSTRUMENTS
040101.

Policv

A.
General. In accordance with Title 3], United States Code (U.S.C), section
3342 (reference (e», disbursing officers (DOs) are authorized to provide check cashing and
accommodation exchange service to military and civilian personnel of the United States (U.S.)
Government, veterans hospitalized or domiciled in Department of Veterans Affairs facilities or
other U.S. Government institutions, contractors engaged in U.S. Government projects (including
contractor personnel) and personnel of authorized nongovernmental agencies operating with
agencies of the United States. It is Department of Defense (DoD) policy that these services shall
be offered only when satisfactory banking facilities are not available and only when checks
presented for cashing are from payees who are U.S. citizens.
B.
United States (U.S)' If on-base commercial banks, other financial
institutions, or exchanges are not available to provide check cashing service, then the
commander may request the Director for Accounting, Defense Finance & Accounting Service
(DFAS), to authorize the DO to cash the negotiable instruments listed in paragraph 040 I02,
below. Such requests, with complete justification, shall be submitted through the Disbursing
Policy and Procedures Section, Financial Services and Disbursing, Defense Finance and
Accounting Service Kansas City (DFAS-DADNKC), ]500 E. 95th Street, Kansas City, MO
64 I 97-0030, via the supporting DFAS site. If approved, then the provisions of section 0402,
below, shall apply. Only the individuals listed in paragraph 040] 04, below, are eligible to
receive check cashing service.
C.
Overseas Areas and Ships Afloat. If military banking facilities, other
financial institutions, or exchanges are not available or adequate to provide check cashing
services, then the commander may authorize the DO to cash those negotiable instruments listed
in paragraph 040]02, below. Only the individuals listed in paragraph 040]04, below, are
eligible to receive check cashing service given that:
1.
The commander's check cashing policy is in writing and is
approved by the theater commander or designee. The policy specifically shall identify the scope
of the services to be offered and the personnel eligible to receive this service.
2.
Adequate resources are available to provide these services without
impacting on levels of other financial management services (e.g., primary disbursing and related
functions).

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3.
The DO has the right to deny check cashing privileges to anyone
based on the nonavailability of cash or personnel resources. The commander's written
authorization shall emphasize this right.
040 I02.
Negotiable Instruments. The negotiable instruments that a DO is
authorized to cash are: U.S. Treasury checks; U.S. postal money orders; travelers' checks; bank
money orders; certified and cashier's checks drawn on U.S. banks; checks from reputable
companies; and other checks and instruments, including personal checks, drawn on U.S. banks or
credit unions in U.S. currency, and payable in United States currency. The DO also may cash
foreign currency checks drawn by accountable officers of the United States on official checking
accounts for the accommodation of authorized personnel.
040103.
Eligibilitv. Eligibility for check cashing services normally shall extend to
all personnel permanently assigned to units in the area served by the DO. Units desiring
personal check cashing privileges from DOs of another activity or Component shall designate a
point of contact (POC) to work with the DO. The DO may require the POC to furnish a list of
personnel on temporary duty/temporary activity duty (TDYITAD) when approved by the DO's
commander. TOYITAD personnel shall give the DO a copy of the TDYITAD orders in addition
to any other items of identification required by the DO. An authorized agent, usually a
dependent, who is authorized, pursuant to a properly executed power of attorney, may receive
check cashing privileges for personal checks drawn on the account of the member, personal
checks drawn on joint accounts to which the member is a party, and any other check which is
drawn in favor of the member. The agent shall present valid identification in the course of all
transactions. All restrictions which apply to benefiting members shall apply to agents of
members under the terms of the executed DD Form 2761 ("Personal Check Cashing
Agreement"), which serves as a power of attorney. This form may be obtained from the
supporting DFAS site for local reproduction.
040104.
Eligible Individuals. Individuals who may be authorized to receive check
cashing services are:

A.

Membersof the U.S. ArmedForces.

B.

Civilianemployeesof the U.S. Governmentwho are U.S. citizens.

c.
U.S. military retirees.
This authorization is contingent upon the
requirement that the theater commander or designee determines that provision of this service is
not prohibited by the Status of Forces Agreement (SOFA) of the country involved and that other
check cashing facilities (e.g., banks or exchanges) are not available or adequate.

D.

Hospitalizedveteransof the U.S. ArmedForces.

E.
Contractors and their employees engaged in U.S. Government projects
given that the contractor is a U.S. firm and the employee is a U.S. citizen.

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F.
U.S. citizens who are employeesof authorizednongovernmentagencies
such as the AmericanRed Crossoperatingwith U.S. Governmentagencies.
G.
Dependents of all the above ordered to safehaven posts due to emergency
evacuation. See Chaoter 12 of this volume for accommodation restrictions.
H.
Dependents of the personnel named in subparagraphs 040 I04.A through
040104.C, above, holding powers of attorney and possessing valid 000 identification cards.
I.
Dependents of the personnel named in subparagraphs 040 I04.0 through
040104.F, above, holding proper identification and powers of attorney.

J.
Third-countrynationalsemployedas civilianemployeesor under contract
to the U.S. Government,or contractorsor subcontractorsthat are U.S. firms engaged in U.S.
Government projects in foreign countries, given the checks presented by the third-country
nationals are U.S. Treasury checks or U.S. dollar checks issued by the contractors to
third-countrynationalswho presentthose checksto be cashed.
K.
U.S. citizenemployeesof federalcredit unionsoperatingon United States
military installations in foreign countries, but only in those countries that do not permit
contractor-operated000 militarybankingfacilitiesto operateon such installations.
040 I05.
Internal Controls. Commanders and other individuals in the chain of
command shall ensure that internal controls are adequate to preclude the fraudulent issuance and
cashing of negotiable instruments. At a minimum, the following procedures shall be followed:
A.
All instruments are endorsed, "Pay to the order of the Disbursing Officer,
(name of ship, station, activity, unit, or the OFAS site)."

B.
The payee(s)shall sign or endorseeach instrumentin the presence of the
DO, a deputyDO, the DO's duly authorizedagent,or a cashier.
C.
The identity of the deputy DO, the DO's agent, or a cashier who provides
the cash clearly shall be identifiable on the negotiated instrument. In the event that the
instrument has been altered or forged, the deputy, agent, or cashier that cashed the instrument
may be held liable. If the instrument becomes nonnegotiable and the identity of the deputy,
agent, or cashier cashing the instrument is not apparent on the instrument, then the DO may be
held accountable.
D.
The deputy DO, the DO's agent, or a cashier who cashes the negotiable
instrument shall properly verify the identity of the person(s) presenting the negotiable instrument
for payment.

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E.
Adequate identification of the payee(s) or endorser(s) is recorded on the
negotiable instrument in order that recovery can be made in the event that the instrument is
dishonored (e.g., legible name, social security number (SSN), duty station/organization, duty
phone, and identification (1.0.) card number).
0402

CASHING PERSONAL CHECKS

04020 I.
Procedures for Cashing Personal Checks Overseas. Aboard Shios and. bv
Exceotion. Within the United States
A.
General. If military banking facilities, other financial institutions, or
exchanges are not available or adequate to provide check cashing services, then the commander
~
authorize the DO to cash personal checks overseas or afloat. These DOs often do not
receive notification of dishonored checks prior to the individuals moving from the deployed
location. In order to expedite collection on dishonored checks, standard overseas and afloat
check cashing procedures applicable to appropriated fund civilians and military personnel
throughout overseas and afloat 000 Components are prescribed in this chapter. Overseas and
afloat disbursing offices, all appropriated civilian payroll offices, and, when individually
approved by the OFAS, all DOs within the United States that provide accommodation exchange
check cashing services shall implement these procedures subject to the following:
I.
A commander may authorize the DO to cash personal checks for
certain authorized individuals, as prescribed in section 040 I, above.
*
2.
The term "commander", as used in these procedures, refers to a
theater commander, base or installation commander, commanding officer or officer-in-charge,
director of the supporting OFAS site, or equivalent civilian head in the chain of command of the
DO.
3.
The commanders and other individuals in the chain of command
shall ensure that internal controls are adequate to preclude the fraudulent cashing of negotiable
instruments.
B.
Exceotions. DOs of Navy vessels may cash personal checks for crew
members when the vessel is in a U.S. port and check cashing facilities are not available for
nonresidents of the area. A nontactical disbursing activity in the United States may provide
check cashing service when a unit, squadron, or detachment, without a DO or disbursing
capability, is performing temporary duty away from its permanent station or homeport in an area
where check cashing facilities are not available for nonresidents of the area. This authority also
applies when units, squadrons, or detachments are engaged in training or exercises which
preclude use of available check cashing facilities. For any situations not described above, the
commander may request authority to provide check cashing service from the Director for
Accounting, OFAS. The request, with complete justification, shall be submitted as prescribed in
subparagraph 040 I0 I.B, above.

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C.
Limitations. Commanders shall establish maximum amounts for personal
checks that may be cashed by authorized personnel and/or their agents. In overseas areas in
which the personnel of two or more Military Services are operating, the senior commander shall
ensure a uniform policy. Although check cashing privileges are required for authorized
personnel and/or their authorized agents in many overseas areas, that service shall be supplied
within sound financial management practices. Command policy and applicable limits, based on
the dictates of the local economy and cost-of-living, shall be published in writing. Deviations
from established command maximum limits shall be published by the supporting DO, in writing,
for each exception. Disbursingofficers shall provide a copy of the authorizationto exceed the
established limit when requesting removal of deficiencies involving uncollectible insufficient
fund checks and any insufficient fund charges that may be assessed by financial institutions for
personal checks they have cashed. See section 0404, below. Checks shall be made payable in
multiples of$5 unless local conditions make that increment impractical. U.S. Treasury checks or
checks issued by insurance companies, banks or credit unions, or other institutions of similar
financial standing may be cashed without regard to dollar amount. All checks shall be drawn on
U.S. financial institutions, overseas branches of U.S. banks or credit unions, or overseas military
banking facilities operated under U.S. Government contract; shall be payable through U.S. banks
or credit unions; and shall be denominated and payable in U.S. currency. The DO shall establish
the days and hours during which the service will be offered and shall make appropriate
notification of any changes. Suspension of check cashing privileges for writers of dishonored
checks shall be governed by this section.

*

D.

Check Cashing Procedures

1.
All authorized military and appropriated fund civilian personnel
who request check cashing privileges shall consent, in writing, to immediate collection against
their pay for the total of any dishonored check. With this procedure, dishonored checks are not
considered to be delinquent debts. Therefore, there is no authority to assess a service charge
(penalty). Regardless, recover any insufficient fund charges assessed on the DO by financial
institutions. Depending on the circumstances, this practice gives the DO two options:

a.

Option 1. The DD Form2761

(1)
If the individual's payroll office is not known or if
the DO or his or her deputies, agents, or cashiers are cashing a check for a civilian employee or
an authorized agent of a civilian employee or military member, then the DO shall use the
DD Form 2761.
(2)
The term "authorized agent", as used on the
DD Form 2761, pertains to an individual, usually a dependent, who is authorized pursuant to a
power of attorney to cash personal checks on behalf of a member or civilian employee as
prescribed in this chapter.

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(3)
With the proper use of this form, a separate power
of attorney on behalf of the individual requesting check cashing service is not required. The
member or employee shall appoint an agent by providing a name(s) in the block titled
"Authorized Agent" of the DD Form 2761. The form shall be signed by the member or
employee. The agent's signature shall be verified against a valid form of identification at the
time the check is presented.
b.
Option 2. An authorized statement, which is stamped on
the ITontof the personal check, may be used only for military members and civilian appropriated
fund employees, but not for the members' authorized agents or other classes of individuals
authorized check cashing privileges.
(1)

If the individual's payroll office

lliknown,

then the

DO can order a rubber stamp in small type to be placed on the front of the check along the top
marginor above the bank's name and addressas shownin figure4-1.
(2)

The stamp shall include the following statement:

"I consent to immediate collection ITommy pay the amount of this check plus bank charges, if this
check is dishonored

_."

(3)
The DO or his or her deputies, authorized agents, or
cashiers shall place this statement on the front of the check in the presence of the individual and
shall ensure the individual's initials are present at the end of the statement to validate immediate
collection ITomthe individual's pay account for dishonored personal checks.
(4)
If the stamp is used, then adequate identification of
the payee shall be recorded on the negotiable instrument in order that recovery can be made in
the event that the instrument is dishonored (e.g., full legible name, DoD Component, SSN, duty
station/organization, duty phone, and I.D. number). This information shall be verified against a
valid DoD identification card.
2.
The following are the responsibilities of DOs and their deputies,
authorized agents, or cashiers when pay account collection for dishonored personal checks
becomes necessary.
a.
When a military member is in the same Component and the
DO maintains the member's account:
(1)
Immediate deduction from the pay account is
authorized for the face value of the dishonored check(s), plus any charges assessed against the
DO by a financial institution for processing dishonored checks.
(2)
As a part of the DFAS consolidation effort, partial
or casual payments are limited to emergency situations. Therefore, DOs shall not use partial or
casual payments as a means of resolving a dishonored check.

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b.
When a military member is from a different Military
Service, or from the same Component,but subparagraph04020I.D.2.a, above, does not apply
(e.g., retirees; members on PCS orders, on TOY, or in any other transitory status), apply the
followingprocedures:
(1)
When the DO Form 2761 is used, the DO shall
make copies of the form (front and back), certify on the reverse side of the form that the
individual consented to voluntary collection, and send it to the appropriate payroll office, as
listed in subparagraph 040201.E, below, to effect the pay account deduction and make restitution
to the negotiating DO. The payroll office shall annotate the reverse side of the DO Form 2761
specifying the action taken for each dishonored check listed.
(2)
When the stamp is used on the face of a check, the
DO shall prepare a DO Form 139 ("Pay Adjustment Authorization"), by Component as follows:
(a)
Attach a listing showing each military
member's name, 000 Component, SSN, unit or duty station, and check amount(s), along with
copies of the checks (front and back). In cases where the depositary adds a fee to the amount of
the dishonored check, a copy of the SF Form 5515 ("Debit Voucher"), shall be included to
substantiate its inclusion in the total amount of the deduction. Send all required documents to
the appropriate payroll office, at the mailing address given in subparagraph 04020I.E, below, for
execution of a pay account deduction.
(b)
Certify that the military members consented
to voluntary collection by typing the following certification statement on the DO Form 139 in
the block titled "Explanation and/or Reason for Adjustment."
"I certify that these collections are the result of dishonored personal checks cashed by the
cited individuals for the amounts stated. Each individual has consented, in writing, that in
consideration for cashing the individual's personal check(s), the amount of any check returned
unpaid, plus any charges assessed against the DO by a financial institution, for any reason may be
collected from the individual's pay."

*
c.
Dishonored personal checks for authorized appropriated
fund civilianemployeeswhosepayrolloffice is knownshall be processedas follows:
(1)
Immediate pay account deductions are authorized
for the face value of dishonored checks plus any charges assessed against the DO by financial
institutions.
*
(2)
The DO shall make copies of the DO Forms
2761 (front and back), certify on the reverse side of each form that the individual consented to
voluntary collection, and attach front and back copies (if applicable) of the checks. In cases
where the depositary adds a fee to the amount of the dishonored check, attach a copy of the

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DoD Financial Manaeement Reeulation

SF Form 5515 to substantiate its inclusion in the amount of the pay account deduction. Send all
documents to the appropriate payroll office listed in subparagraph 04020I.E, below, for pay
account deduction(s).

*
d.
Dishonored personal checks for authorized appropriated
fund civilianemployeeswhose payrolloffice is unknown:

*
(1)
If the DO or his or her deputies, authorized agents,
or cashiers cannot locate the individual's payroll office, then a copy of the DO Form 2761 (front
and back) shall be sent to one of the civilian payroll offices Iisted in subparagraph 040201.E,
below.
*
(2)
When the payroll office receives a copy of the
DO Form 2761 (front and back) requesting assistance in locating the individual's payroll office,
that payroll office shall be responsible for the following.
(a)
If known, give the DO the name, address,
and phone number ofthe individual's payroll office.
(b)

If the payroll office is unknown, determine

the correct payroll office.

(c)
Once the correct payroll office has been
determined, the DO shall follow the procedures prescribed in subparagraph 040201.D.2.c.(2),
above.

3.
When collectionaction becomes necessaryand the payroll office
receivesthe DO Form 139or DO Form2761 fromthe DO, the payrolloffice shall be responsible
for the following:
a.

Processing the pay account deduction following normal

payroll procedures.
b.
When possible, the payroll office shall include a statement
similar to the following in the remarks column of the leave and earnings statement
(LES): "Consensual collection action for a dishonored check."
c.
The applicable payroll office shall annotate the
DO Form 139 or DO Form 2761 with the action taken for the dishonored check(s) and return the
document to the submitting DO to support the SF 1219 ("Statement of Accountability").
d.
The 000 Component payroll office shall enter the
collections and centrally issue checks, after the debt has been collected, payable to the DO
holding the dishonored check(s) for the amount(s) that has been collected each pay period until
the total debt is satisfied.

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NOTE: The 000 activity that receives the check shall ensure that the check is made payable
and forwarded to the DO holding the dishonored check(s). The payment shall be made in full.
A check is necessary to remove the dishonored check(s) from the DO's SF 1219 for the
situations described in this chapter.
4.
When a military member or 000 civilian employee is separated or
cannot be located to make restitution (e.g., when a military member or 000 civilian employee
separates or resigns), the DO shall process dishonored checks following the procedures
otherwise prescribed in this chapter.
5.
The writing of checks in advance of the availability of funds
(floating a check) cannot be condoned or tolerated. Therefore, individuals who abuse their check
cashing privilege by writing checks against insufficient funds shall be denied future check
cashing privileges.

*

6.

Retention of Documents

a.
For all personal checks that are honored, the DO cashing
those checks shall retain the original signed DO Form2761 until 6 monthsafter the individual
transfersto a new duty station/installationor separates.
*
b.
For all dishonored checks, the original DO Form 2761 shall
remain with the dishonored check file until resolved. If the consent statement is stamped on the
front of the check and the check is dishonored, then the DO, or his or her deputies, agents, or
cashiers shall make a copy of the front and back (if applicable) of the check and shall retain the
dishonored check file until the matter is resolved.
E.
000 Component Pavroll Office Addresses. The 000 Component payroll
office addresses listed below are included to expedite collection on dishonored checks. These
addresses shall be used when mailing DO Forms 139 and the DO Forms 2761 when used as a
pay adjustment authorization. The DO shall use the addresses in Table 4-1 when mailing these
forms to another 000 Component payroll office and the DO shall ensure that the office codes
given are included in the address.

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