B-169818, JUN. 2, 1970

B-169818: Jun 2, 1970

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TO GENERAL CHAPMAN: REFERENCE IS MADE TO THE LETTER DATED MAY 13. CONCERNING THE ACCEPTABLE FORM OF CREDIT DATA REQUIRED BY 4 CFR 105.3 TO ACCOMPANY ADMINISTRATIVELY UNCOLLECTIBLE CLAIMS WHICH ARE REFERRED TO THE GENERAL ACCOUNTING OFFICE FOR FURTHER COLLECTION ACTION. REPORTS WERE REQUESTED FROM A COMMERCIAL CREDIT BUREAU ON 356 DEBTORS. WAS UNABLE TO PROVIDE ADEQUATE CREDIT DATA ON 159 OF THOSE DEBTORS. SUBSECTION (A) OF 4 CFR 105.3 REQUIRES THAT THE REFERRAL OF CLAIMS TO THIS OFFICE SHALL BE ACCOMPANIED BY REASONABLY CURRENT CREDIT DATA INDICATING THAT THERE IS A REASONABLE PROSPECT OF SUCCESSFUL COLLECTION ACTION. NO PARTICULAR FORM IS REQUIRED FOR THE DEBTOR'S FINANCIAL STATEMENT AND WE HAVE NO OBJECTION TO THE USE OF THE FORM ENCLOSED BY THE FISCAL DIRECTOR.

B-169818, JUN. 2, 1970

TO GENERAL CHAPMAN:

REFERENCE IS MADE TO THE LETTER DATED MAY 13, 1970, FROM THE FISCAL DIRECTOR OF THE MARINE CORPS (YOUR REFERENCE AS-3-11/MKM "B"), CONCERNING THE ACCEPTABLE FORM OF CREDIT DATA REQUIRED BY 4 CFR 105.3 TO ACCOMPANY ADMINISTRATIVELY UNCOLLECTIBLE CLAIMS WHICH ARE REFERRED TO THE GENERAL ACCOUNTING OFFICE FOR FURTHER COLLECTION ACTION.

THE FISCAL DIRECTOR REPORTS THAT IN ORDER TO COMPLY WITH 4 CFR 105.3, WHICH REQUIRES THAT CREDIT DATA BE SUBMITTED WITH ADMINISTRATIVELY UNCOLLECTIBLE DEBTS REFERRED TO THIS OFFICE FOR FURTHER COLLECTION ACTION, THE MARINE CORPS HAS BEEN OBTAINING CREDIT REPORTS FROM COMMERCIAL CREDIT BUREAUS. IN MAY AND JUNE 1969 ALONE, REPORTS WERE REQUESTED FROM A COMMERCIAL CREDIT BUREAU ON 356 DEBTORS. THE BUREAU, HOWEVER, WAS UNABLE TO PROVIDE ADEQUATE CREDIT DATA ON 159 OF THOSE DEBTORS. IN VIEW OF THE EFFORT AND EXPENSE EXPENDED IN OBTAINING COMMERCIAL REPORTS AND THE LACK OF APPRECIABLE RETURN THEREFOR, THE FISCAL DIRECTOR RECOMMENDS THAT THE MARINE CORPS, WHEN TRANSMITTING DEBTS UNDER 4 CFR 105 FOR FURTHER COLLECTION ACTION BY THIS OFFICE, BE PERMITTED TO SUBMIT, ON A FORM SUCH AS THE ONE ENCLOSED WITH HIS LETTER, A FINANCIAL STATEMENT FILLED OUT BY THE INDIVIDUAL DEBTORS RATHER THAN REPORTS PREPARED BY COMMERCIAL CREDIT BUREAUS.

SUBSECTION (A) OF 4 CFR 105.3 REQUIRES THAT THE REFERRAL OF CLAIMS TO THIS OFFICE SHALL BE ACCOMPANIED BY REASONABLY CURRENT CREDIT DATA INDICATING THAT THERE IS A REASONABLE PROSPECT OF SUCCESSFUL COLLECTION ACTION. SUBSECTION (B) PROVIDES THAT:

"SUCH CREDIT DATA MAY TAKE THE FORM OF (1) A COMMERCIAL CREDIT REPORT, (2) AN AGENCY INVESTIGATIVE REPORT, SHOWING THE DEBTOR'S ASSETS AND LIABILITIES AND HIS INCOME AND EXPENSES, (3) THE INDIVIDUAL DEBTOR'S OWN FINANCIAL STATEMENT EXECUTED UNDER PENALTY OF PERJURY REFLECTING HIS ASSETS AND LIABILITIES AND HIS INCOME AND EXPENSES, OR (4) AN AUDITED BALANCE SHEET OF A CORPORATION." THUS, THE CLAIMS COLLECTION REGULATIONS SPECIFICALLY PROVIDE THAT THE REQUIRED CREDIT DATA MAY TAKE THE FORM OF A FINANCIAL STATEMENT EXECUTED BY A DEBTOR, UNDER PENALTY OF PERJURY. HAVING OBTAINED SUCH A STATEMENT, IT WOULD BE UNNECESSARY TO OBTAIN A REPORT FROM A COMMERCIAL CREDIT BUREAU. NO PARTICULAR FORM IS REQUIRED FOR THE DEBTOR'S FINANCIAL STATEMENT AND WE HAVE NO OBJECTION TO THE USE OF THE FORM ENCLOSED BY THE FISCAL DIRECTOR.

MOREOVER, WE CALL YOUR ATTENTION TO THE LETTER REPORT DATED NOVEMBER 24, 1969, B-116704 (2), FROM THE DIRECTOR, CLAIMS DIVISION, TO THE SECRETARY OF THE NAVY, IN WHICH THIS OFFICE, UPON REVIEW OF THE DEBT COLLECTION PROCEDURES OF THE MARINE CORPS FINANCE CENTER, KANSAS CITY, MISSOURI, RECOMMENDED THAT FINANCIAL INFORMATION SHOULD BE REQUESTED FROM THE DEBTOR AT THE TIME DEMANDS ARE ISSUED RATHER THAN WHEN PAYMENT BY INSTALLMENT OR A COMPROMISE IS OFFERED OR WHEN THE CLAIM IS TO BE TRANSMITTED TO THIS OFFICE FOR FURTHER COLLECTION ACTION.