COOPERATIVE AGREEMENTS WITH STATES

Mr. WHITTEN. We note that one of your efforts for fiscal year 1985 will be to continue to encourage growth in relationship between the Commission and states, particularly in the areas of information sharing, joint surveillance, and enforcement efforts. Have any states signed cooperative agreements with the Commission or is that a possibility?

Ms. PHILLIPS. The Commission has not entered into any formal cooperative agreements with any state, nor has such a procedure been contemplated or suggested. Our experience in the area of cooperative enforcement with the states indicates that such agreements are not necessary in order to accomplish joint enforcement goals and to foster cooperation. The Commission's Division of Enforcement staff both in Washington and in the regions has developed a close on-going working relationship with state enforcement officials as well as the North American Securities Administrators Association. As a result state requests for information or assistance, whether legal, technical or investigative, are answered efficiently and informally by the staff. It is important to note that the Commission staff has worked closely with NASAA and the National Futures Association in developing a Model State Commodity Code for the regulation of certain commodity transactions not subject to the exclusive jurisdiction of the Commission.

LONG-RANGE PLANNING

Mr. WHITTEN. One of the objectives of the Executive Director is to act as a focal point for long-range planning for the agency. In light of the significant decreases proposed for 1986, what impact will this have on long-range planning?

Ms. PHILLIPS. The decreases proposed make long-range planning more important. By going through a process of determining its highest priorities, the Commission must engage in planning to determine how to allocate scarce resources to meet those priorities and how to find alternative methods of meeting its lower priorities.

AIR FORCE PERSONNEL SYSTEM

Mr. WHITTEN. We note on page 24 of the explanatory notes that your personnel office completed a major conversion from the existing personnel system to the Air Force personnel system. What is the Air Force personnel system?

Ms. PHILLIPS. The Air Force personnel system is the automated Personnel Management Information Telecommunications System, referred to as PERMITS, which was initially developed and used by the Department of the Air Force and later adopted by other agencies. As the name implies, the system is used to process a variety of functional information which is required for personnel management. The Air Force system is used and managed by the Commission's Personnel Section to process, edit, and retrieve personnel actions and related management information.

INSTRUCTIONS FOR THE COLLECTION OF PENALTIES AND FEES

Mr. WHITTEN. Please provide the Committee with a copy of the agencywide instructions for the collection of civil monetary penalties and collection of cash fees by Commission employees.

Ms. PHILLIPS. I will be happy to provide copies of these instructions for the record.

[The information follows:]

To establish a Civil Monetary Penalty Collection Program. To advise
other CFTC divisions and offices of the policy and procedures in
the administration of the program.

II. AUTHORITY

III.

The Federal Claims Collection Act of 1966 and the Debt Collection Act of 1982 (31 U.S.C. 3711 et seq.) place responsibility for collecting debts due the United States on adininistrative agencies. Title 4 of the GAU Policy and Procedures Manual and the Federal Claims Collection Standards (4 CFR Parts 101-105) provide additional guidance on collecting debts.

SCOPE AND APPLICABILITY

This instruction applies to all organizational elements of the CFTC.

IV. OBJECTIVES

The objectives of the Civil Monetary Penalty Collection program are
to provide:

A. Sufficient internal controls to properly account for payments.
B. Sufficient documentation of the collection process.

C. For the establishment of the most efficient and least costly
collection methods.

CFTC Instruction 604-1

V. RESPONSIBILITIES

A. Executive Director.

B.

The Executive Director acting on behalf of the Chairman of the
CFTC, as the "head of the agency," is responsible for overseeing
the establishment and maintenance of systems for the collection
of civil monetary penalties. This includes the approval of
all guidelines established to implement or modify the program.

The Director, Operations and Budget Section.

1. Administers the Civil Monetary Penalty Collection Program,
serving as the central reference point for the Commission.

2. Develops and recommends guidelines to implement the program.
3. Provides guidance to Commission personnel on the program.
4. Recommends the issuance of revised directives to reflect
current requirements, improvements or policy.

5. Notifies respondents obligated to pay civil penalties where
and in what manner they are to make payment and informs
them of interest, penalties and administrative charges
which may be assessed.

6. Accepts and deposits civil penalty payments and notifies the Enforcement Division and the Proceedings Clerk of all payments received and any checks returned for nonpayment.

7. Maintains official record of civil penalty payments identifying individually each penalty payment deposited.

8. Conducts quarterly reconciliations with the Enforcement Division and provides the Proceedings Clerk with a copy of the reconciliation document.

9. Takes appropriate steps to collect delinquent penalties.

10. Prepares required periodic reports to the Department of the Treasury.

11. Provides the Executive Director with an annual report of the penalties assessed, collected and outstanding.

CFTC Instruction 604-1

C. Director, Enforcement Division.

8

1. Maintains the civil monetary penalties log book containing
the amount, docket: number, due date of each civil penalty
assessed and the date and amount of all payments.

2. Notifies the Operations and Budget Section in writing of
final Commission orders imposing civil penalties and the
last known address of the respondent(s) responsible for
payment of the penalty(ies).

3. On a quarterly basis reconciles penalties assessed and paid
with the Operations and Budget Section.

4. Confers with the Operations and Budget Section on appropriate action to be taken on delinquencies.

5. Forwards cases to and acts as liaison with the Attorney General, as necessary.

VI. COLLECTION PROGRAM

The collection program is designed to provide assurance that transactions are properly recorded to maintain accuracy and accountability for all monies due the Commission. The program also provides for a coordinated centralized record which enhances the Cominission's ability to insure that fines assessed are collected.

A. Collection Process.

1. The Proceedings Clerk's office codes all final orders which
impose civil penalties with "CF" in the upper right hand
corner of the order.

2.

The Division of Enforcement enters the following information concerning orders imposing civil penalties in the "Log Book":

a. Docket number

Name of Respondent ordered to pay the civil penalty
Amount of the civil penalty

b.

C.

d.

Date of the order

e.

Date payment of the civil penalty is due

f. Date notice is sent to the Operations and Budget

Section.

When the Operations and Budget Section notifies the Division
that payment has been made, the Division notes the amount
paid and the date of payment in the Log Book.

3. After an order imposing a civil penalty becomes final, the
Enforcement Division forwards to the Operations and Budget