Debt Collection:

Opportunities Exist for Improving FMS's Cross-Servicing Program

GAO-04-47: Published: Oct 31, 2003. Publicly Released: Oct 31, 2003.

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GAO has previously reviewed facets of Treasury's Financial Management Service's (FMS) cross-servicing efforts. These reviews did not include FMS's handling of nontax debts that were returned to FMS uncollected by its private collection agency (PCA) contractors because FMS officials did not consider the cross-servicing program to be fully mature. During fiscal years 2000, 2001, and 2002, FMS's PCA contractors returned about $3.9 billion of uncollected debts to FMS. This report focuses primarily on (1) actions taken by FMS on uncollected nontax debts returned from its PCA contractors and (2) actions taken, if any, by FMS and the Office of Management and Budget (OMB) to ensure that federal agencies are reporting their eligible uncollectible nontax debts to IRS as income to debtors.

Although FMS has made progress in implementing its cross-servicing program and considers it to be fully mature, opportunities exist to improve the program. FMS had not reviewed most of the debts returned to it by its PCA contractors to determine whether any opportunities for collection or other recoveries remained, including those possible from reporting closed-out debts to IRS as income to debtors. For example, about $3.7 billion of the $6.6 billion of debts that were at FMS for cross-servicing as of February 28, 2003, were being kept in the Treasury Offset Program (TOP) for passive collection after they had been returned uncollected to FMS by PCA contractors. Passive collection entailed no further collection action on the part of FMS other than minimal efforts through offset, and collections on debts in passive collection through offset totaled only about $9 million through February 28, 2003. Various problems hindered collections through offset, including the fact that many of the debts were beyond the 10-year statutory and regulatory limitations for offset. GAO's analysis also showed that relatively few debts in cross-servicing were being referred to the Department of Justice for more aggressive enforced collection action. This analysis further showed that FMS continues to have problems with debt compromises and the reporting of a key cross-servicing performance measure. Finally, neither FMS nor OMB monitored or reported the extent to which federal agencies governmentwide were closing out all eligible uncollectible debts and reporting those amounts to IRS as income to debtors.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: To address this recommendation, FMS revised the format of its annual Report to the Congress and no longer includes the performance measure concerning the percentage of debt referred for cross-servicing in the report. By not including this performance measure in its annual report, FMS no longer overstates its cross-servicing program's accomplishments in this area.

    Recommendation: To help maximize the soundness of the cross-servicing program, the Secretary of the Treasury should direct the Commissioner of FMS to fully implement our recommendation made in fiscal year 2000 to revise FMS's key performance measure on cross-servicing referrals so that the extent to which federal agencies have referred debts to cross-servicing directly corresponds to the eligible debts as of fiscal year-end. Specifically, the debt-eligible amount should reflect the amount reported by federal agencies as of fiscal year-end, and the debt-referred amount should reflect the amount in cross-servicing as of fiscal year-end.

    Agency Affected: Department of the Treasury

  2. Status: Closed - Implemented

    Comments: In April 2004, the Office of Management and Budget (OMB) sent a Memorandum to the Chief Financial Officers requiring federal agencies to review their internal polices regarding the compromising, writing-down, forgiving, or discharging of debts and provide OMB a description of deficiencies in those policies and corrective actions taken or to be taken. OMB stated that it will utilize these reports from the individual agencies to report to the Congress on the deficiencies, if any, found at the agencies and the progress in resolving such deficiencies. As a result of OMB's actions, OMB and the Congress will have enhanced their abilities to monitor and improve the extent to which federal agencies government-wide are reporting uncollectible debts to the IRS, which could generate additional tax revenue for the U.S. Government.

    Recommendation: The Director of OMB should direct the Controller of OMB's Office of Federal Financial Management to require agencies to report to OMB on their policies, deficiencies, and corrective actions, if any.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Closed - Implemented

    Comments: In April 2004, the Office of Management and Budget (OMB) sent a Memorandum to the Chief Financial Officers requiring agencies to review their internal standards and policies regarding compromising, writing-down, forgiving, or discharging debt (i.e., reporting uncollectible debts to the IRS). Federal agencies are now required to provide OMB a brief description of these internal policies and a statement as to whether such policies are consistently being implemented among the programs within that agency. As a result, federal agencies must examine their internal policies for closing out debts to the requirements established by DCIA and OMB Circular A-129 to determine whether their internal policies provide reasonable assurance that all uncollectible debts are being promptly reported to the IRS. Based on the results of these evaluations, federal agencies will be required to identify and resolve any deficiencies in their internal policies for reporting uncollectible debts to the IRS, which could generate additional tax revenue for the U.S. Government.

    Recommendation: The Director of OMB should direct the Controller of OMB's Office of Federal Financial Management to require agencies to initiate actions to review and correct any deficiencies they find during their review.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  4. Status: Closed - Implemented

    Comments: In April 2004, the Office of Management and Budget (OMB) sent a Memorandum to the Chief Financial Officers reminding federal agencies to adhere to the requirements for reporting closed out debts to the IRS, as set forth by DCIA and OMB Circular No. A-129. In addition, the Memorandum required federal agencies to provide a written statement as to whether all eligible discharged/closed out debt has been reported to the IRS on Form 1099C by January of the year following the discharge of the debt and that these amounts have been reported to Treasury's Financial Management Service on the Treasury Report on Receivables within the same reporting period that the 1099C's were actually filed with the IRS. As a result, federal agencies will be more inclined to report uncollectible debts to the IRS, which could generate additional tax revenue for the U.S. Government. In addition, federal agencies are directed to properly report discharged/closed out debt on the Treasury Report on Receivables that will enhance the ability of OMB, Treasury, and GAO to monitor the extent to which agencies government-wide closed out debts and reported uncollectible debts to the IRS.

    Recommendation: The Director of OMB should direct the Controller of OMB's Office of Federal Financial Management to remind agencies of their obligation to comply with the standards and policies of individual agencies for writing off and closing out debts, as required by the DCIA and OMB Circular A-129.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  5. Status: Closed - Implemented

    Comments: FMS revised the Instructional Workbook for Preparing Treasury's "Report on Receivables Due From the Public" (TROR) to include the amount of currently not collectible (CNC) debts that were closed out. Specifically, according to the instructions for section D, for CNC debt reclassified as closed out during the calendar year, each agency should report the cumulative number and dollar amount of debt for which collection action has ceased. This debt is removed from the CNC category and closed out during the current calendar year. In addition, the TROR form was modified to include a line item called "CNC Reclassified as Closed Out During the CY".

    Recommendation: To help ensure that all federal agencies are appropriately reporting closed-out debts to IRS, the Secretary of the Treasury should direct the Commissioner of FMS to revise information requirements for the TROR to include the amount of CNC debts that are closed out.

    Agency Affected: Department of the Treasury

  6. Status: Closed - Implemented

    Comments: FMS revised its Treasury Report on Receivables (TROR) Instruction Manual to require disclosure of significant differences in the amounts of debt closed out and the amount of debt reported to the IRS. Specifically, the manual now states that "If there is a significant difference between the amount of debt reported as closed out and the amount of debt reported to the IRS, please describe in the footnote section the amount of this difference and the reason for this difference."

    Recommendation: To help ensure that all federal agencies are appropriately reporting closed-out debts to IRS, the Secretary of the Treasury should direct the Commissioner of FMS to require all federal agencies to disclose in their TRORs any significant differences between the amount of debt reported as closed out and the amount of debt reported to IRS and the reasons for those differences.

    Agency Affected: Department of the Treasury

  7. Status: Closed - Implemented

    Comments: FMS' Birmingham Debt Management Operations Center (BDMOC) developed a query using the Discoverer system in which all inactive debts are identified at the first of each month. The results of the Discoverer query are converted to an Excel spreadsheet for use by the BDMOC collectors. The spreadsheet contains the debt number, debt state, amount of the debt, and the collector's name. Each debt is reviewed by the collectors and a determination is made as what the next step in the collection process should be. The collector enters a note in the debt history, and routes the completed spreadsheet to a supervisor for review and approval. The supervisor reviews the debt history records, debt/debtor information, and the suggested action by the collector to assure that the debts are not eligible for additional collection tools or the issuance of an IRS Form 1099C. Debts that are identified to be eligible for other collection tools, e.g., referral to TOP, a PCA, or IRS 1099C, are added to the collector worklist. Debts that are approved for return to the agency are processed by the supervisor. The collectors have until the end of each month to analyze and take action on the debts that appear on the Discoverer report.

    Recommendation: To help ensure that all appropriate collection action is taken on debts returned from FMS's PCA contractors, the Secretary of the Treasury should direct the Commissioner of FMS to establish and implement procedures to periodically monitor debts that are held in inactive status to avoid debt backlogs and to help ensure that all debts are promptly reviewed to determine whether additional collection action or close-out and reporting to IRS is warranted. Monthly may be a reasonable interval for performing such monitoring.

    Agency Affected: Department of the Treasury

  8. Status: Closed - Implemented

    Comments: FMS developed a list of criteria to use when making a determination that a debt should be returned to the agency as uncollectable. According to that criteria, FMS was in the process of performing a query of TOP to identify debts that should no longer be in the TOP database. FMS described this as a labor intensive effort because each debt had to be manually reviewed to determine which debts would be returned to the referring agency or closed out and reported to IRS.

    Recommendation: To help ensure that all appropriate collection action is taken on debts returned from FMS's PCA contractors, the Secretary of the Treasury should direct the Commissioner of FMS to remove debts from TOP that are not eligible for offset and determine whether the debts should be closed out and reported to IRS or returned to the referring agency.

    Agency Affected: Department of the Treasury

  9. Status: Closed - Implemented

    Comments: FMS developed a procedure to periodically identify debts in TOP whose statute of limitations had expired and those that were flagged as being in bankruptcy. FMS provided (1) documentation of the query used to identify debts held in TOP for passive collections where the statute of limitations had expired and (2) a sample of the query results showing the expired statute of limitations dates and the bankruptcy flags. FMS also provided a copy of the request to close and return debts in TOP where the statute of limitations date exceeded 10 years.

    Recommendation: To help ensure that all appropriate collection action is taken on debts returned from FMS's PCA contractors, the Secretary of the Treasury should direct the Commissioner of FMS to establish and implement procedures to periodically review debts that are kept in TOP for passive collection to determine whether the statute of limitations has expired or any other conditions, such as bankruptcy, exist that would prevent offset of the debts in TOP.

    Agency Affected: Department of the Treasury

  10. Status: Closed - Implemented

    Comments: To determine whether debts should be closed out and reported to IRS or returned to the referring agencies, Debt Management Service periodically extracts and analyzes debts to identify those in TOP that have reached their 10-year statute of limitations. Following analysis, a request is made for DMS to either close out the debt and report it to IRS or return the debt to the referring agency. FMS provided a series of requests to extract data, as well as a copy of the listings resulting from the extracts, and the requests to evaluate the debts for close out or return to referring agencies.

    Recommendation: To help ensure that all appropriate collection action is taken on debts returned from FMS's PCA contractors, the Secretary of the Treasury should direct the Commissioner of FMS to, after all collection activities have been exercised, determine whether debts should be closed out and reported to IRS by FMS, and, if not, promptly return them to the referring agencies.

    Agency Affected: Department of the Treasury

  11. Status: Closed - Implemented

    Comments: FMS revised its Standard Operating Procedures for the Cross-Servicing Program to include procedures for a semi-annual query of its automated system to review debts held in TOP for passive collection. According to the policy, on a semi-annual basis, cross-servicing analysts will request a query of all active debts in TOP to identify debts where no offsets have occurred in 36 months and all other approved collection actions have been completed. The results of this query will be exported to Excel format by program code and provided to the appropriate program/creditor agency for evaluation. The program/creditor agency will evaluate the report and provide instruction to FMS as to whether identified debts should remain in TOP, be returned to the agency, discharged, or subject to other action(s). Debts discharged or returned to agency will appear on a Debt Disposition Report. FMS provided an example of the information sent to program/creditor agencies for review.

    Recommendation: To help ensure that all appropriate collection action is taken on debts returned from FMS's PCA contractors, the Secretary of the Treasury should direct the Commissioner of FMS to establish and implement procedures to periodically review debts that are kept in TOP for passive collection to determine the next best course of action for the debts to maximize collections or other recoveries.

    Agency Affected: Department of the Treasury

  12. Status: Closed - Implemented

    Comments: FMS completed design and implementation of FedDebt to allow identification of debts in the "Passive at TOP" debt state. FMS provided a sample of debts identified in the "Passive at TOP" debt state in FedDebt as well as the supporting computer query.

    Recommendation: To help ensure that all appropriate collection action is taken on debts returned from FMS's PCA contractors, the Secretary of the Treasury should direct the Commissioner of FMS to identify debts kept in TOP for passive collection through the implementation of FedDebt and, in the interim, utilize appropriate analytical database software to identify such debts.

    Agency Affected: Department of the Treasury

  13. Status: Closed - Implemented

    Comments: OMB reported on federal agencies' debt collection, deficiencies, and corrective actions in its 2007 Federal Financial Management Report. Appendix G, titled "Debt Collection Deficiencies and Corrective Actions," provided details, by agency, on identified deficiencies and corrective actions taken to improve debt collection, including issues related to writing-off and closing-out debts and reporting such debt to the Internal Revenue Service.

    Recommendation: The Director of OMB should direct the Controller of OMB's Office of Federal Financial Management to report annually to the Congress on the deficiencies, if any, found at the agencies and the progress in resolving any deficiencies found.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  14. Status: Closed - Implemented

    Comments: FMS developed two database queries to identify cross-serviced debts eligible for DOJ referral. One query identifies debts in TOP for passive collection by State, and the other query identifies debts recommended for litigation by PCAs. In addition, FMS met with DOJ officials to discuss and evaluate potential changes to FMS' DOJ referral criteria, which resulted in a list of criteria to be used for evaluating debts for referral. FMS also provided a list of evaluation procedures for DOJ Query and Potential Debt Referrals.

    Recommendation: To increase opportunities for collecting debts, the Secretary of the Treasury should direct the Commissioner of FMS to revise the database query methodology FMS uses to identify cross-serviced debts for DOJ referral. The methodology should include debts kept in TOP for passive collection and should also incorporate information from FMS's PCA contractors.

    Agency Affected: Department of the Treasury

  15. Status: Closed - Implemented

    Comments: FMS reminded private collection agency (PCA) contractors of the importance of obtaining debtors' taxpayer identification numbers when compromising debts in a Technical Bulletin dated March 2004. Specifically, the bulletin stated that "PCAs are not permitted to accept any compromise agreement without obtaining the debtors' tax identification number (TIN). FMS or the originating agency may need to issue a 1099C for the forgiven amount of a compromised debt. A 1099C cannot be issued without the debtor's TIN. Therefore, the debtor's TIN is required for all compromise agreements, regardless of whether the agreement is within the compromise standards forwarded to the PCA."

    Recommendation: To help maximize the soundness of the cross-servicing program, the Secretary of the Treasury should direct the Commissioner of FMS to remind PCA contractors, through a technical bulletin or other means, of the importance of obtaining debtors' TINs when compromising debts.

    Agency Affected: Department of the Treasury

  16. Status: Closed - Implemented

    Comments: According to a FMS official, FMS prepared, with concurrence by its Office of Chief Counsel, penalty provision language that will be incorporated into any new private collection agency (PCA) contract. The PCA contract awarded in 2007 contains the following penalty provision language: "The Contractor is authorized to compromise debts and enter into repayment agreements within certain thresholds provided by the Government for each account and in accordance with applicable laws, regulations, and policies (for example, the Federal Claims Collection Standards). The Government retains the right to deduct from any of the Contractor's fees (Commission Fees and/or Monetary Bonus Fees) due under this Task Order an amount equal to the amount of loss to the Government on any commitment, compromise, or repayment agreement made by the Contractor inconsistent with the standards or thresholds provided to the Contractor or applicable laws, regulation, and policies. In the event that the Contractor fails to properly document the justification for accepting a repayment agreement or payment for less than the full balance due on a debt, as required by Part II.C.4.3.5.2. of this Task Order (Payment Standards), the Government may, at its option, presume that a compromise settlement or repayment agreement is inconsistent with the applicable requirements. The amount of loss to the Government shall be based upon the difference between the Net Collections that the Government determines should have been collected by the Contractor and the Net Collections actually received by the Government."

    Recommendation: To help maximize the soundness of the cross-servicing program, the Secretary of the Treasury should direct the Commissioner of FMS to incorporate liquidated damages or a penalty provision in the next PCA contract for failure of PCA contractors to document a compromise in accordance with contract requirements.

    Agency Affected: Department of the Treasury

  17. Status: Closed - Implemented

    Comments: FMS reinforced the private collection agency (PCA) contractors' adherence to the compromise requirements set forth in the PCA contract for documenting the justification for the compromise of a debt in a Technical Bulletin dated March 2004. Specifically, the bulletin states that, if a collector is unable to collect the full amount or obtain the full amount of the debt due in a repayment agreement, the collector "may then attempt to negotiate a compromise amount to be paid in one payment. In accordance with the Federal Claims Collection Standards, to determine the debtor's inability to pay the full amount of the debt, PCAs must obtain the debtor's financial information, such as a credit report and completed financial statement. This financial information should also be used to determine an appropriate compromise amount. Finally, if unable to collect a compromise amount in one payment, the collector must provide a documented justification before allowing a debtor to pay a compromise amount over a period of six months."

    Recommendation: To help maximize the soundness of the cross-servicing program, the Secretary of the Treasury should direct the Commissioner of FMS to reinforce PCA contractors' adherence to the compromise requirements set forth in the PCA contract for documenting the justification for the compromise of a debt.

    Agency Affected: Department of the Treasury

  18. Status: Closed - Implemented

    Comments: FMS reinforced private collection agency (PCA) contractors' adherence to the compromise requirements set forth in the Federal Claims Collection Standards in a Technical Bulletin dated March 2004. Specifically, the bulletin states that "In accordance with the Federal Claims Collection Standards, to determine a debtor's inability to pay the full amount of the debt, PCAs must obtain the debtor's financial information, such as a credit report and completed financial statement. This financial information should also be used to determine an appropriate compromise amount."

    Recommendation: To help maximize the soundness of the cross-servicing program, the Secretary of the Treasury should direct the Commissioner of FMS to reinforce PCA contractors' adherence to the compromise requirements set forth in the Federal Claims Collection Standards for obtaining a debtor's financial information, such as credit reports and complete financial statements, to determine the debtor's inability to pay the full amount of the debt.

    Agency Affected: Department of the Treasury

  19. Status: Closed - Implemented

    Comments: FMS reinforced private collection agency (PCA) contractors' adherence to the compromise requirements set forth in the PCA contract for documenting the attempt to collect the full amount of a debt prior to its compromise in a Technical Bulletin dated March 2004. Specifically, the bulletin states that "PCAs are again reminded of the payment standards set forth in Section C.4.3.5 of the task order. PCA collectors must first attempt to collect the full amount of each debt due in one payment. If unable to do so, a justification must be documented. The collectors must then attempt to obtain the full amount of the debt due in a repayment agreement. If unable to do this, again, a justification is required and must be documented."

    Recommendation: To help maximize the soundness of the cross-servicing program, the Secretary of the Treasury should direct the Commissioner of FMS to reinforce PCA contractors' adherence to the compromise requirements set forth in the PCA contract for documenting the attempt to collect the full amount of a debt prior to its compromise.

    Agency Affected: Department of the Treasury

  20. Status: Closed - Implemented

    Comments: FMS established procedures to monitor and track all debt amounts forgiven by its in-house collectors, and it has implemented FedDebt with the ability to capture the forgiven amounts for all compromise agreements, whether established in-house or by PCA contractors, in all possible compromise agreement statuses. FMS procedures require compromise agreements to be entered into FedDebt, and FMS has developed a report in FedDebt to capture data for all debts placed in a compromise status. The report provides the location of the debt, the date the agreement was effective, the debt balance on the effective date of the agreement, the compromise amount to be paid, the compromised percent, the dollar amount forgiven for each debt in compromise status, and the status of each compromise agreement, e.g., active, denied, defaulted, or pending. FMS provided a sample report showing compromises made by FMS in-house collectors and PCA contractors.

    Recommendation: To help maximize the soundness of the cross-servicing program, the Secretary of the Treasury should direct the Commissioner of FMS to establish procedures to monitor and track all debt amounts forgiven by in-house FMS collectors and ensure that the FedDebt system identifies the forgiven amounts for all compromise agreements established by in-house FMS collectors.

    Agency Affected: Department of the Treasury

  21. Status: Closed - Implemented

    Comments: FMS completed enhancements to TOP to allow the system to accept multiple debtors for a single debt. In addition, FMS developed and implemented the FedDebt system with the ability to refer multiple debtors for the same debt to TOP and track balances and financial transactions at the debtor level. FMS provided screen prints showing multiple debtors who share the same debt as referred from FedDebt to TOP. The screen prints also detail debtor case balances and related transactions at the debtor level.

    Recommendation: To increase opportunities for collecting debts, the Secretary of the Treasury should direct the Commissioner of FMS to implement enhancements to the TOP system so that it can accept multiple debtors for a single debt, and ensure that the FedDebt system will be capable of being used to report secondary debtors to TOP.

    Agency Affected: Department of the Treasury

  22. Status: Closed - Implemented

    Comments: FMS' Birmingham Debt Management Operations Center developed a query using the Discoverer system to identify all debts in cross-servicing that are potentially eligible for TOP. The query is run on a quarterly basis. The results of the query are converted to an Excel spreadsheet for use by collectors. The spreadsheet contains the collector name, agency name, debt identification number, taxpayer identification number, and demand letter date. Each debt is reviewed by the collector or a supervisor, and a determination is made as to what the next step in the collection process should be, i.e., referral to TOP. Debts that are identified to be eligible for referral to TOP are added to the collector's worklist and the recommended action is applied.

    Recommendation: To increase opportunities for collecting debts, the Secretary of the Treasury should direct the Commissioner of FMS to establish and implement procedures to monitor all debts in cross-servicing to help ensure that debts are promptly reported to TOP, including periodically sweeping the portfolio to send debts to TOP.

    Agency Affected: Department of the Treasury

  23. Status: Closed - Implemented

    Comments: According to an FMS official, FMS has updated the procedures it uses for referring debts to DOJ for enforced collection and has implemented the FedDebt system which is capable of tracking debts that FMS refers to DOJ. FedDebt updates case statuses, indicating when a case is pending referral to DOJ and when a case has gone to DOJ, and it creates notes in the case history as a case moves through the referral process. The DOJ Analyst Work List in FedDebt allows the DOJ Analyst to follow a case through the referral process and complete actions, as needed. FMS provided examples of FedDebt screen prints that show the tracking of claims that have been marked for submission to DOJ and the tracking after referral to DOJ. In addition, FMS provided two FedDebt queries that generate reports that track debts FMS refers to DOJ, including a summary of debts that are at DOJ called the "Ad Hoc DOJ Referral Candidate Debts Report" and a summary of debts that are marked "Pending DOJ referral" called the "Ad Hoc Debts in DOJ Processing State Report."

    Recommendation: To increase opportunities for collecting debts, the Secretary of the Treasury should direct the Commissioner of FMS to establish and implement procedures to track all debts FMS has referred to DOJ and ensure that the FedDebt system is capable of tracking all debts that FMS refers to DOJ.

    Agency Affected: Department of the Treasury

  24. Status: Closed - Implemented

    Comments: In a Technical Bulletin, issued March 2004, FMS reminded the private collection agency (PCA) contractors of the importance of enforced collections and their recommendation for next collection action, including litigation, to be taken on debts returned to FMS. In addition, to remind PCA contractors which agencies have authorized FMS to refer debts to DOJ on the agencies' behalf, the last page of the bulletin contained a list of the 34 federal programs that have not authorized FMS to refer debt to DOJ, rather than list all of the 618 programs that have authorized FMS to perform this function.

    Recommendation: To increase opportunities for collecting debts, the Secretary of the Treasury should direct the Commissioner of FMS to remind PCA contractors of the importance of enforced collection and that their recommendation for next collection action, including litigation, is a critical part of their responsibilities, and inform the PCA contractors of the agencies that have authorized FMS to refer debts to DOJ on the agencies' behalf.

    Agency Affected: Department of the Treasury

  25. Status: Closed - Implemented

    Comments: FMS reported to its Private Collection Agency (PCA) contractors in PCA Technical Bulletin Number 30, dated March 26, 2004, the criteria used by FMS to select debts for referral to DOJ, and subsequently incorporated this information into the PCA Operations and Procedures Manual. Specifically, the manual states that a debt with a balance greater than $1 million that is not collectible through the use of a collection agency may be referred to DOJ, but it must be accompanied by a major credit bureau report, a summary of collection activity, a confirmation that the address is valid, and a financial statement and asset locator, if available.

    Recommendation: To increase opportunities for collecting debts, the Secretary of the Treasury should direct the Commissioner of FMS to incorporate FMS's criteria for selecting debts for DOJ referral in FMS's PCA Operations and Procedures Manual.

    Agency Affected: Department of the Treasury

 

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