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CHAPTER 4
U.S. TREASURY CHECKS
In disbursing operations today, the primary method
the government uses to make a payment to settle a
particular obligation is to issue a U.S. Treasury check.
In the past, cash was often used because it was easier;
however, with the ready availability of computers and
the changes they have brought to financial transactions
and accountability, check payments have almost
completely replaced the use of cash payments. In this
chapter, you will read about some basic rules for
procuring, handling, and issuing U.S. Treasury checks.
After studying the information in this chapter, you
should be able to explain the authorized uses of U.S.
Treasury checks and recognize and understand some
basic terms associated with their uses. You should also
be able to identify specific procedures required for their
procurement, security, maintenance, issue, control, and
disposition.
AUTHORIZED USES
Although treasury checks are the primary method
of making payments, their use has limitations.
Disbursing officers DOs will issue checks only for the
following purposes, and even then only according to the
specific laws and regulations governing each of these
purposes:
Military pay and allowances
Civilian payrolls
Public vouchers for purchases and services
Travel claims
Authorized advances to travelers and agents
Deposits to the credit of the U.S. Treasurer
Exchange-for-cash remittances
Exchange-for-cash disbursements
These purposes, along with their associated regulations
and laws, provide the criteria for a DO’s accountability
governing his or her authority to use U.S. Treasury
checks to satisfy government obligations.
NEGOTIABILITY
To be payable, a U.S. Treasury check must meet
specific negotiability requirements. For example, all
U.S. Treasury checks issued on or after 01 October 1989
are payable up to 1 year from the date of issue. On the
other hand, all checks issued before 01 October 1989
were void effective 01 October 1990.
LIMITED PAYABILITY
U.S. Treasury checks have a limited payability of
12 months from the date of issue. The Department of
the Treasury cancels all checks not cashed within this
prescribed time limit.
The proceeds of these
cancellations are credited to the Department of the Navy
budget clearing account.
NON-NEGOTIABLE CHECKS
Sometimes checks may be presented for payment
that are not negotiable because of these regulations. In
these cases, the checks must be verified as to whether
or not they represent a valid payment and replaced
whenever appropriate. The payee of a check that has
been canceled because of limited playability must file a
claim with a Navy DO to obtain a replacement check.
The procedures for replacement will be discussed later
in this chapter.
DEFINITIONS
Before we describe the various procedures
governing the use of U.S. Treasury checks, let’s take a
look at some commonly used terms and their
definitions. As a senior DK, you should become
familiar with these terms because they are universally
used in the world of disbursing. Needless to say, we
will frequently use these terms throughout this chapter.
SPOILED CHECK
A spoiled check is a check that was misprinted or
mutilated during the issue process or one that the payee
returned as uncashable because of a defect in the check
itself. A spoiled check should be replaced by a control
check bearing the same symbol and serial number.
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