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Chapter 7000

PROCEDURES FOR PROCESSING POSTAL MONEY ORDERS

Section 7010 -Scope And Applicability

This chapter prescribes the procedures to be followed by Federal Reserve banks and branches (FRBS) in handling paid U.S. Postal Money Orders. These procedures cover the responsibility of the United States Postal Service (USPS) to pay, reconcile and audit postal money orders. Treasury prescribes the method of processing the charges through Treasury's General Account.

Section 7015 -Authority

These instructions are issued according to authority of the Secretary of the Treasury to prescribe regulations to FRBs in connection with their fiscal agency responsibilities under 12 U.S.C. 265 and 391.

Section 7020 -General Information And Format

All post offices sell paper money orders to the public. These money orders are paid at commercial banks and other depositaries of the Federal Reserve System and sent to FRBS. The FRBs will charge the account of USPS for the amount of the paid money orders and report these charges on the daily transcript of the U.S. Treasury. The FRBs then will send the money order documents to USPS. Upon receipt of the money order documents from the FRBS, USPS will reconcile and audit the documents. USPS will report all money order transactions on the Statement of .Transactions to the Deposit Reconciliation Branch (TFM 4-7095) at the end of each month.

Paper money orders are 3 1/4 inches high, 6 inches long, and are designed to meet American Bankers Association (ABA) check standards and characteristics, including MICR preprinting (Appendix No. 1.) The ABA routing number with the check digit in the transit field (0000-0020 or 000000204) is shown on each money order. The general format and the upper serial number is printed by the forms printer. The date, post office number, and the upper amount is entered by the postal clerk at time of issue. In the lower MICR line, the bank routing number and the on-us field (Money Order Serial Number) are entered by the forms printer. The "pay to" and "purchaser" information is entered by the postal customer who purchases the money order.

All FRBs are advised of the presence of the OCR Read Band, with a width of 9/16ths of an inch beginning 3/8ths of an inch from the top of each paper money order which is used by the USPS for processing paid money orders. FRBs are requested to refrain from writing, stamping, marking, endorsing, etc., in the area of the OCR Read Band. FRBs are further requested to avoid, if possible, any heavy endorsing on the reverse side of the money order in the area of the OCR Read Band.

There are a number of outstanding "punch card" postal money orders that were issued prior to the introduction of paper style postal money orders in the spring of 1973, which bear the ABA routing number 0000-01 19. These money orders have a commercial life of 20 years. Processing instructions for the "punch card" postal money orders are in II TFM 4-7070 of these instructions.

Section 7030 -Definitions

The terms used in this chapter are defined as follows:

  • Federal Reserve Banks (FRBs). This term refers to district banks and branch banks of the Federal Reserve System.
  • Banks. These are the commercial banks and other depositaries of the FRBS.

7030.10 -MOD. This is the abbreviation of the Money Order Division of the USPS Postal Data Center at St. Louis, Missouri, which has accounting and auditing control over money orders.

7030.15 -Money Order. Unless otherwise qualified, this term means the Postal Money Order that has the ABA routing number 0000-0020 or 000000204 shown on the form.

7030.20 -Replacement Money Order. A money order issued by the USPS to replace another money order. It will contain a different serial number (starting with 99) but will not be subject to any special processing by the FRBS.

7030.25 -Fit Money Order. A money order that can be completely processed on high speed processing equipment.

7030.30 -Mutilated Money Order. A money order not physically fit for processing on high speed equipment. This does not include money orders bearing unreadable MICR characters in the on-us field.

7030.35 -Old Style Money Order. A card style money order bearing ABA routing number 0000-0119.

7030.40 -International Reissue Money Order (Appendix No. 1). This money order appears similar to the Domestic Money Order; however, the validation plate on the money order is preprinted, not imprinted, and no monetary limitation is shown on the face of the money order. These money orders are negotiable for a maximum of $400.00, as noted on the reverse of the document. All International Reissue Money Order serial numbers will begin with "89." Unlike domestic money orders, international money orders are valid for a period of only I year. The expiration date is printed on the face of the money order. If presented within the period of validity these money orders should be negotiated and processed in the same manner as domestic money orders.

7030.45 -Domestic-international (Semi-domestic) Money Orders (Appendix No. 1). These money orders are issued by 14 countries, with which the United States has agreements, and the money orders from these countries are accepted for payment in the United States. Appendix No. 1 gives a list of the 14 countries that issue the money orders.

7030.50 -International Postal Money Orders (Appendix No. 1). These money orders are similar to domestic and international reissue money orders. All international money order serial numbers begin with the number "88." The lower right-hand corner of these orders is annotated "Not negotiable in USA." Any international postal money orders deposited by a member bank should be returned to the presenting bank so that the bank may recover funds from the customer who presented it for payment.

7030.55 -Non-Negotiable International Money Orders (Appendix No. 1 ). These are foreign money orders, other than semi-domestic, and cannot be accepted for payment in the United States. These money orders, purchased in foreign countries and mailed to persons in the United States and cashed at local banks, should be charged back through banking channels to the original endorser. The bulk of the money orders is received from France, Germany, Australia, Great Britain, Belgium, and New Zealand.

7030.60 -Bank No. or FRB Code (Appendix No. 1 ). This term refers to the four digits of the FRB routing symbol. This number is to be used on various documents for charging or shipping of money orders to USPS.

7030.65 -Batch. This is a group of paid money orders placed under one control total (or subtotal) by the FRB. A separate USPS Batch Locator Control Document will precede the items in each batch. Normally, a batch of fit money orders will consist of not more than 500 items, and a batch of mutilated money orders will consist of not more than 200 items (II TFM 4-7075).

7030.70 -USPS Batch Locator Control Document (Appendix No. 1). The USPS Batch Locator Control Document is a preprinted document furnished by the USPS to the FRBS. The document is inserted at intervals of not more than 500 money orders by the FRB. It is sequentially numbered and each sequence should be maintained in the insertion of the document.

7030.75 -Batch Number. This is a 7-digit sequential number shown in the OCR and MICR read line of the USPS Batch Locator Control Document.

7030.80 -Reasonable Tolerance. This term is used when USPS verifies charges made by the FRBs for paid money orders as indicated on the PS Form 1175 "Domestic Money Orders- Recapitulation of Batch Totals," and finds a minor difference in the amount which the USPS will not require to be adjusted.

7030.85 -Box Label (Appendix No. 1). FRBs are to be advised that the front end of each box of money orders forwarded to the MOD will be labeled to show the FRB Code, transcript charge date, box number, and total number of boxes in the shipment.

Section 7035 -Charges For Postal Money Orders

The FRBs will prepare SF 5515, "Debit Voucher," for 8-digit accounting station code or agency location code (ALC) 18-00-0005 to charge postal money orders based on cash letters or other deposit documents received that have accompanying postal money order documents. After machine classification is made, in order to correct any amount undercharged for money orders made on the original charge of the SF 5515, another SF 5515 will be prepared and processed. If an overcharge is made on the original SF 5515, the FRB will process an SF 215 "Deposit Ticket" for the amount overcharged to ALC 18-00-0005. Appendix No. 1 provides instructions and the distribution of the SF's 5515 and 215. The net amount of all debit vouchers and deposit tickets reported to ALC 18-00-0005 must be shown on the FRBs Daily Balance Wire to BGFO on line 14-A. This amount is reconciled to the confirmed copies of the debit vouchers and deposit tickets received at MOD, St. Louis, Missouri.

PS Form 1901 "Advice of Classification for Postal Money Orders" is basically a reconciliation form prepared by the FRB. Certain data from the SF's 5515 or 215 (confirmed date, document, number, and amount) will be. shown under the block titled "Charge to ALC 18-00-0005." This amount must agree with the total for the block titled "Classification of Postal Money Orders" which reflects the description, code, number of items, and amount of the postal money orders being shipped. The money order documents will be shipped to MOD, St. Louis, Missouri. Adjustments of errors made on previous shipments will also be reported under the "Classification of Postal Money Orders" block and supported by completing the "Schedule of Adjustments Entered Under Code 003" shown at the bottom of the PS Form 1901 (Appendix No. 1). NO COPIES OF THE PS FORM 1901 WILL BE SENT TO TREASURY.

Each PS Form 1901 is accountable to USPS, therefore, if the FRB voids a PS Form 1901, send all copies to:

Postal Data Center
Processing Control Division
Attn: Accounting Section
P.O. Box 14431
St. Louis, MO 63180

These voided copies should not be included with the shipment of money orders. If the PS Form 1901 is destroyed, Processing and Control Division, Accounting Section, should be advised in writing.

Section 7040 -Processing Fit Money Orders

Batching and Listing Fit Money Orders. Paper money orders are MICR printed with the routing code (including a routing number of 0000-0020 or 000000204) and the serial number with check digit. The routing number is also preprinted in the upper right corner on the form, which is in the location and front as prescribed by the ABA. FRBs will process FIT money orders as follows:

  • Receive money orders from banks and process on high speed equipment in the manner most compatible with the processing of other categories of cash items.
  • Prepare batches of no more than 500 items.
  • Insert (in numerical sequence) USPS batch Locator Control Documents so that one is filed at the beginning of each batch of money orders to be read.
  • Create a paper-tape list of serial numbers with optional check digit and amount of each money order read. The list will show the batch number and a subtotal for each batch with an overall total of all money orders listed on the paper tape.
  • The total amount of fit items should be entered on PS Form 1901, code 100.
  • Money orders bearing unreadable MICR characters in the on-us field are not to be rejected and handled as mutilated. List the characters that can be read on the paper tape as a reconcilement aid.

7040.10 -Preparation of Recapitulation of Batch Totals. Prepare a PS Form 1175 (Appendix No. 1) or equivalent machine produced summary daily for the batches processed and listed on the paper tapes. Enter each batch number, item count, and total separately. The DAILY TOTAL line of the PS Form 1175 must equal codes 100 and 110 on the PS Form 1901. Submit a separate PS Form 1175 to support code 400 of "Dom. Intl" on the PS Form 1901.

7040.20 -Adjustments Between Amounts Charged and Money Orders Listed. The total amount of the PS Forms 1175 should agree with the amount classified on the PS Form 1901. If the total amount of the PS Form 1175 is larger than the amount shown on the PS Form 1901, prepare another SF 5515 for the NET AMOUNT OF THE DIFFERENCE and process for ALC 18-00-0005. Whenever the total amount of the PS Form 1175 is less, prepare an SF 215 for ALC 18-00-0005 and process for the NET AMOUNT OF THE DIFFERENCE. These documents will be functioned on the daily transcript and listed on the PS Form 1901.

7040.30 -Shipping Money Orders. Instructions for shipping money orders to MOD are as follows.

  • Place batches of money orders, including the USPS Batch Locator Control Documents in shipping boxes. Maintain the money orders and batches in the same sequence as they were read and listed on the paper tape list.
  • Mail the original PS Form 1901 to:

Postal Data Center
Processing Control Division
Attn: Accounting Section
P.O. Box 14431
St. Louis, MO 63180

  • Attach the last three copies of PS Form 1901, to the PS Form 1175 or machine equivalent and place all documents in the last box of money orders for that day.
  • Place the paper tape list and the mutilated tapes in the same box.
  • Batches of mutilated money orders may be included in the same box or in the same shipment as fit money orders, provided the batches of mutilated money orders are clearly identified as mutilated.
  • Place a completed box label on the front of each box. The boxes should bear sequential numbers on the labels (e.g., "Box 2 of 4") to facilitate USPS processing.
  • When justified by the number of boxes shipped, the boxes may be in the larger No. 5 box shipping carton.
  • Place the boxes and cartons in mail pouches for delivery to the USPS representatives. Due to the limited space available on the pouch label, the mailing address on the label should read as follows:

St. Louis Missouri 63182
MOD P.O. Box 14963
From: F.R.B. (City)

Shipment will be made to the MOD by registered mail using pouches with rotary locks provided by the USPS.

7050 -Processing Mutilated Money Orders

This section relates to the handling of mutilated paper money orders with ABA routing numbers 0000-0020 or 000000204.

7050.10 -Mutilated paper money orders must be grouped in batches not to exceed 200 documents in a batch. If the total number of mutilated items does not exceed 200, they may be handled as one batch. For larger quantities, make as many batches as necessary, not exceeding 200 in any one batch.

7050.20 -Insert a USPS Batch Locator Control Document at the beginning of each batch of mutilated money orders.

7050.30 -Prepare an adding machine listing of each batch showing the following information:

  • FRB name or code at the top.
  • The amount of each item.
  • The total amount of the batch.
  • FRB clearance date.
  • Batch number.

7050.40 -Batches of the paper money orders that cannot be machine processed without first being MICR amount encoded may be delivered to the USPS representative without processing, provided the above requirements are essentially met.

7050.50 - The total amount of mutilated items should be entered on the PS Form 1901, code 110.

Section 7060 - Detection Of Stolen Or Raised Money Orders

FRBs are not required to institute regular routing procedures for the detection of stolen or raised money orders. However, each FRB will cooperate, in special circumstances, to aid USPS representatives in the detection of these items.

Section 7065 - Adjustment of Errors

Adjustment of errors and charges by the FRB will be made by using SF 5515 for ALC 18-00-0005, and PS Form 1176 "Schedule of Differences in Money Order Clearances". (Appendix No. 1). All charges or credits accepted will be identified by the FRB, itemizing the schedule number, as indicated on PS Form I 1 76, and amount on the PS Form 1901 for code 003.

Section 7070 - Processing Old Style Money Orders

"Punch card" money orders that have the ABA routing number 0000-0119 will be handled as mutilated items. They should be identified as old style "punch card" money orders on the PS Form 1901 for code 004.

Section 7075 -Processing Domestic International Money Orders (Semi-Domestic)

Canadian money orders, ABA routing number 0000-0127, and Canal Zone money orders, ABA routing number 0000-0800, can be mechanically processed; all others must be processed manually. The batch size of Canadian money orders cannot exceed 200 documents. Money orders of different countries cannot be intermingled; each country must be batched separately. The total of all domestic-international money orders should be shown under code 400 on the PS Form 1901.

Section 7080 -Other Procedural Matters

7080.10 -Postal Service Reimbursement to FRBs. The Postal Service has agreed to reimburse the FRBs for services provided in processing postal money orders beyond the level of service provided to financial institutions paying cash items. Charges will be determined by an annual survey, according to Federal Reserve and U.S. Postal Service agreements, and will be billed monthly with a single bill for each Federal Reserve District submitted to the Money Order Division, and will be paid at the end of each 6 months. The Postal Service reserves the right to review and challenge the method used in calculating these charges.

7080.20 -Replacement of Money Order Lost in Transit. When a money order is lost in transit, in place of submitting a photostatic copy, a PS Form 6401 "Domestic Money Order Inquiry", must be submitted (Appendix No. 1). The forms are available at all post offices. The money order serial number, amount, purchaser or payee, name and address to whom a replacement is to be issued, and the written signature of the person filing the request for replacement must be completed on the PS Form 6401. The remaining information should be provided, if available, to aid in the replacement process. If the original money order has been paid, a replacement cannot be issued. A photocopy of the paid item will be provided without cost to the FRB.

Requests for information from member banks as to FRB date, batch number, and amount in which a particular money order was enclosed but listed free; was MICR encoded wrong or was processed but not credited to the bank, should be made by memorandum or letter to:

Redemption Reconciliation Section
Money Order Division
P.O. Box 14975
St. Louis, MO 63182

If a replacement was previously requested and the request was returned "Paid", then the information on the returned PS Form 6401 should be provided as part of your memorandum or letter.

7080.30 -Alternative Procedures. The Postal Service and the Federal Reserve System will continue, as capabilities and resources permit, to work toward truncating Postal Money Orders at the FRBs for subsequent data transmission to the Money Order Division. Acceptable alternative procedures resulting from this effort will be specified in subsequent amendments to this chapter.

Section 7090 - Procurement of Forms

The Postal Service forms PS-1901 and 1175 may be obtained from:

St. Louis Postal Data Center
P.O. Box 14963
St. Louis, Missouri 63182

However, obtain pouch labels (showing the mailing address for money orders), box labels, and money order shipping boxes from your local postmaster.

Section 7095 - Inquiries

Questions concerning the processing of Postal money orders may be directed to:

St. Louis Postal Data Center
P.O. Box 14963
St. Louis, MO 63182
Telephone:  314-425-5475; FTS 279-5475

Inquiries relating to Domestic -International money orders (semi-domestic) should be addressed to:

St. Louis Postal Data Center
P.O. Box 14972
St. Louis, MO 63182

Questions on accounting documentation that affect Treasury's General Account may be directed to:

Deposit Reconciliation Section
Division of Government Accounts and Reports
Bureau of Government Financial Operations
Department of the Treasury
Treasury Annex No. 1
Attn: GAO Bldg., Room 3108
Washington, D.C. 20226
Telephone: 202-566-6521

APPENDIX NO. 1 LISTING

Forms Prescribed For Processing Postal Money Orders

Form Title

Postal Money Orders

Postal Money Orders

Domestic-International (Semi-domestic Countries)

Bank No. or FRB Code

USPS Batch Locator Control Document

Label 9 Money Order File Locator No.

SF 5515 Debit Voucher

SF 215 Deposit Ticket

PS Form 1901 Advice of Classification for Postal Money Orders

PS Form 1175 Domestic Money Orders Recapitulation of Batch Totals (Domestic -Fit and Mutilated)

PS Form 1175 Domestic Money Orders Recapitulation of Batch Totals (Semi-domestic)

PS Form 1176 Schedule of Differences in Money Order Clearances

PS Form 6401 Domestic Money Order Inquiry

Non-Negotiable International Money Orders

[GRAPHIC]
SAMPLE POSTAL MONEY ORDERS

[GRAPHIC]
SAMPLE POSTAL MONEY ORDERS

Domestic International (Semi-Domestic) Countries

Countries where money order service is available on domestic basis are:

Antigua Dominica
Bahamas Grenada
Barbados Montserrat
Belize Saint Kitts-Nevis-Anquilla
British Virgin Islands Saint Lucia
Canada (U.S. Currency Only) Saint Vincent
Canal Zone Trinidad & Tobago

Bank No. or FRB Code

Federal Reserve Federal Reserve
Bank and Branches Code Bank and Branches Code

Atlanta.............. 0610 Little Rock...... 0820
Baltimore............ 0520 Louisville....... 0830
Birmingham........... 0620 Los Angeles...... 1220
Boston............... 0110 Memphis.......... 0840
Buffalo.............. 0220 Miami............ 0660
Charleston, W.V..... 0430* Milwaukee........ 0420*
Charlotte............ 0530 Minneapolis...... 0910
Chicago.............. 0710 Nashville........ 0640
Columbia............. 0410* New Orleans...... 0650
Columbus............. 0440 New York......... 0210
Dallas............... 1110 Oklahoma City.... 1030
Denver............... 1020 Omaha.......... 1040
Des Moines........... 0730 Philadelphia..... 0310
Detroit.............. 0720 Portland......... 1230
El Paso.............. 1120 Richmond......... 0510
Helena............... 0920 Salt Lake City... 1240
Houston.............. 1130 San Antonio...... 1140
Indianapolis......... 0740 San Francisco.... 1210
Jacksonville...............0630 Seattle.......... 1250
Kansas City.......... 1010 St. Louis........0810

* Until the supply of USPS Batch Locator Control Document cards has been exhausted, these three branches will report under the codes listed above on all documentation forwarded to U.S. Postal Service.

[GRAPHIC]
USPS Batch Locator Control Document

[GRAPHIC]
LABEL 9

[GRAPHIC]
SF 5515
DEBIT VOUCHER

[GRAPHIC]
SF 215
DEPOSIT TICKET

Instructions for Preparing SF 5515 for Charging U.S. Postal Money Orders

Block Number

(1) Self-explanatory (Voucher number is preprinted on form).

(2) Insert date amount was charged.

(3) Insert the U.S. Postal Service eight-digit agency accounting station code or agency location code (ALC) 18-00-0005.

(4) Insert the total amount of charges for Postal Money Orders from cash letters or other documents.

(5) Place the letter 'X' In the block in front of 'OTHER.'

(6) Insert the following: Redeemed Postal Money Orders.

(7) Insert name and address of the Federal Reserve bank or branch and its Bank Code as shown in this appendix on page 4 of 14.

(8) Self-explanatory.

(9) Insert the address as shown in this exhibit.

Distribution of SF 5515 Copies

Copy

Original Transmit on TFS Form 17. Transcript of the General Account of the U.S. Treasury. on the date charge was made.

Memorandum
Agency

Confirmed Mail to address shown in block (9).

Depositary Retained by Federal Reserve Bank or branch.

[GRAPHIC]
PS FORM 1901

[GRAPHIC]
PS FORM 1175 FOR DOMESTIC -FIT AND MUTILATED

[GRAPHIC]
PS FORM 1175 FOR SEMIDOMESTIC

[GRAPHIC]
PS FORM 1176

[GRAPHIC]
PS FORM 6401

[GRAPHIC]
NON-NEGOTIABLE INTERNATIONAL MONEY ORDERS