B-89120, NOVEMBER 23, 1949, 29 COMP. GEN. 230

B-89120, NOVEMBER 23, 1949, 29 COMP. GEN. 230

REPORTING OF SMALL DEBTS DUE THE GOVERNMENT APPARENTLY UNCOLLECTIBLE ITEMS OWED BY THIRD PARTIES TO CONTRACTORS, IN WHICH THE GOVERNMENT HAS A FINANCIAL INTEREST BY REASON OF THEIR RELATION TO COST-REIMBURSABLE CONTRACTS WITH THE ATOMIC ENERGY COMMISSION, WHEN THE AMOUNTS THEREOF ARE $50 OR OVER, ARE TO BE REPORTED TO THE GENERAL ACCOUNTING OFFICE WITH SUPPORTING DOCUMENTS FOR APPROPRIATE ACTION; SUCH DEBTS IN AMOUNTS OF $25 TO $49.99 MAY BE REPORTED IN LIST FORM WITHOUT SUPPORTING DOCUMENTS, AND THOSE UNDER $25 NEED NOT BE REPORTED, BUT A RECORD THEREOF SHOULD BE MAINTAINED IN THE ADMINISTRATIVE OFFICE EVEN THOUGH NO FURTHER COLLECTION ACTION IS CONTEMPLATED.

ASSISTANT COMPTROLLER GENERAL YATES TO THE CHAIRMAN, ATOMIC ENERGY COMMISSION, NOVEMBER 23, 949:

REFERENCE IS MADE TO LETTER DATED SEPTEMBER 7, 1949, FROM THE CONTROLLER, ATOMIC ENERGY COMMISSION, PROPOSING CERTAIN PROCEDURES FOR HANDLING UNCOLLECTIBLE ACCOUNTS OF THE COMMISSION'S COST-TYPE CONTRACTORS IN WHICH THE GOVERNMENT, BECAUSE OF REIMBURSEMENT OF THE COST TO THE CONTRACTOR, HAS THE PRINCIPAL FINANCIAL INTEREST.

IT IS STATED IN THE SAID LETTER THAT, IN CONNECTION WITH THE ATOMIC ENERGY PROGRAM, COST-TYPE CONTRACTORS HAVE BEEN AND ARE RESPONSIBLE FOR OPERATION OF MANY GOVERNMENT-OWNED PROPERTIES, FACILITIES, AND SERVICES SUCH AS RESIDENCES, HOTELS, DORMITORIES, RESTAURANTS, HOSPITALS, LAUNDRIES, ETC., IN CONNECTION WITH WHICH THE UNCOLLECTIBLE ACCOUNTS HAVE ARISEN. ALSO, IT IS STATED THAT THE COST-TYPE CONTRACTORS HAVE MADE REASONABLE EFFORTS TO COLLECT ALL SUCH ACCOUNTS BUT THAT, DESPITE THESE EFFORTS--- AND IN SOME CASES ADDITIONAL STEPS BY COMMERCIAL COLLECTION AGENCIES AND BY COURT ACTION--- THE CONTRACTORS HAVE NOT BEEN ABLE TO EFFECT COLLECTION AND THAT, AFTER REVIEW BY THE COMMISSION OF THE ADEQUACIES OF THE ATTEMPTS TO EFFECT COLLECTION, THE CONTRACTORS HAVE BEEN AUTHORIZED TO DISCONTINUE COLLECTION ACTIVITIES. THE LETTER INCLUDES A TABULATION OF THE UNCOLLECTIBLE ITEMS IN THE CASE OF ONE COST-TYPE CONTRACTOR SELECTED FOR ILLUSTRATIVE PURPOSES, WHICH SHOWS THAT 59.6 PERCENT OF THE UNCOLLECTIBLE ITEMS ARE IN AMOUNTS OF LESS THAN $10, 24.9 PERCENT RANGE FROM $10 TO $50, 8 PERCENT FROM $50 TO $100, AND 7.5 PERCENT ARE IN AMOUNTS OF $100 OR OVER. THE TABLE SHOWS FURTHER THAT THE ITEMS OF $100 AND OVER COMPRISE 53.8 PERCENT OF THE AGGREGATE AMOUNT OF THE UNCOLLECTIBLE ITEMS UNDER THE CONTRACT INVOLVED; THAT 18.8 PERCENT OF THE TOTAL AMOUNT IS COMPOSED OF ITEMS FROM $50 TO $100, AND THAT APPROXIMATELY 85 PERCENT OF THE NUMBER OF ITEMS IN AMOUNTS OF LESS THAN $50 ACCOUNTS FOR APPROXIMATELY 27 PERCENT OF THE TOTAL AMOUNT OF THE UNCOLLECTED ACCOUNTS. IT IS STATED THAT THE COMMISSION IS SEEKING TO DEVELOP PROCEDURES WHICH WILL PROPERLY DISPOSE OF THE UNCOLLECTIBLE ACCOUNTS YET BE FEASIBLE ECONOMICALLY, TAKING INTO CONSIDERATION THE SIZE OF THE ACCOUNT, THE COST AND LIKELIHOOD OF COLLECTION, AND THE EFFECTS WHICH SUCH POLICIES MIGHT HAVE UPON CURRENT DEBTORS OF THE COMMISSION AND ITS COST-TYPE CONTRACTORS. IT IS PROPOSED THEREIN THAT ALL UNCOLLECTIBLE ACCOUNTS UPON WHICH REASONABLE EFFORTS TO EFFECT COLLECTION HAVE BEEN EXPENDED BE TRANSFERRED FROM THE ACTIVE RECORDS OF THE CONTRACTORS AND OF THE COMMISSION; THAT ALL SUCH ACCOUNTS OF THE COST-TYPE CONTRACTORS BE ASSIGNED TO THE UNITED STATES; THAT THOSE IN THE AMOUNT OF $100 OR OVER, WITH SUPPORTING PAPERS, BE FORWARDED TO THE CLAIMS DIVISION, GENERAL ACCOUNTING OFFICE, FOR APPROPRIATE ACTION; THAT ALL THOSE UNDER $100 BE RETAINED IN THE COMMISSION FOR INSPECTION BY REPRESENTATIVES OF THE GENERAL ACCOUNTING OFFICE, BUT THAT FURTHER ACTIVE STEPS TO COLLECT SUCH LATTER AMOUNTS BE DISCONTINUED. IT IS FURTHER SUGGESTED THAT IT MIGHT BE DESIRABLE TO MAKE AVAILABLE TO THE CLAIMS DIVISION A LISTING OF ALL, OR PART, OF THE ACCOUNTS IN AMOUNTS LESS THAN $100 FOR POSSIBLE OFFSET PURPOSES, BUT THAT IT IS HOPED THE BURDEN OF PHYSICALLY TRANSFERRING ALL THE FILES TO THIS OFFICE CAN BE ELIMINATED, EXCEPT AS TO THOSE SPECIFIC CASES WHICH ARE DETERMINED TO WARRANT SUCH EFFORT.

UNDER THE CIRCUMSTANCES OUTLINED ABOVE THE PROCEDURES SUGGESTED IN THE LETTER OF SEPTEMBER 7, 1949, ARE APPROVED AS HEREINAFTER MODIFIED. FOR THE PRESENT, IT IS DEEMED DESIRABLE THAT, AFTER ASSIGNMENT TO THE GOVERNMENT, UNCOLLECTIBLE ACCOUNTS IN THE AMOUNT OF $50 OR OVER BE FORWARDED TO THE CLAIMS DIVISION, GENERAL ACCOUNTING OFFICE, WITH SUPPORTING DOCUMENTS FOR APPROPRIATE ACTION. WITH RESPECT TO UNCOLLECTIBLE ACCOUNTS IN AMOUNTS BETWEEN $25 AND $49.99, A LISTING THEREOF SHOULD BE FORWARDED TO THE CLAIMS DIVISION AFTER ASSIGNMENT THEREOF BY THE CONTRACTOR TO THE GOVERNMENT. THE LISTING OF SUCH ACCOUNTS SHOULD SHOW THE FULL NAME OF THE DEBTOR, TOGETHER WITH ANY OTHER IDENTIFICATION OF RECORD, SUCH AS HIS SOCIAL SECURITY NUMBER, THE LATEST ADDRESS OF RECORD, THE AMOUNT OWING, AND THE NATURE OF THE INDEBTEDNESS IN EACH CASE. FURTHERMORE, DOCUMENTARY EVIDENCE PERTAINING TO ANY ITEM OF INDEBTEDNESS ON THE LIST AS MAY BE REQUIRED IN INDIVIDUAL CASES IS TO BE FURNISHED UPON A REQUEST THEREFOR BY THE CLAIMS DIVISION OF THE GENERAL ACCOUNTING OFFICE.

NO ACTION NEED BE TAKEN TO REPORT TO THE CLAIMS DIVISION ANY UNCOLLECTIBLE ITEM WHICH IS IN AN AMOUNT LESS THAN $25, BUT A RECORD THEREOF SHOULD BE MAINTAINED ON THE BOOKS OF THE COMMISSION ALTHOUGH NO FURTHER ACTIVE STEPS TO COLLECT THE SAME ARE TO BE TAKEN.