Civil Debt Collection:

Justice's Private Counsel Pilot Program Should Be Expanded

GGD-94-195: Published: Sep 14, 1994. Publicly Released: Sep 14, 1994.

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Pursuant to a legislative requirement, GAO reviewed the Department of Justice's (DOJ) private counsel debt collection pilot program, focusing on: (1) whether the program is a cost-effective mechanism for collecting delinquent nontax civil debt; (2) collection results and program costs; and (3) whether the use of private counsel firms effectively reduces the debt collection caseload.

GAO found that: (1) the DOJ pilot program has generally been successful; (2) private counsel firms and U.S. Attorneys Offices (USAO) participating in the pilot program have collected $122.5 million in debt, at a total estimated cost of $5.3 million; (3) private counsel firms have collected $9.2 million in nontax civil debt at a cost of $2.4 million; (4) although USAO have collected substantially more unpaid civil debt at nearly the same cost as private counsel firms, the cost-effectiveness of using USAO and private counsel firms to collect civil debt could not be fully determined; (5) private counsel firms have addressed much of the backlogged debt caseload and a majority of the total debt cases referred to them for collection; (6) Department of Education officials believed that they could not have handled the volume of delinquent student loan cases without the assistance of private counsels; (7) six of the seven participating USAO believe that continued private counsel assistance is required to manage their overall civil and criminal debt caseload; (8) between 1985 and 1992, the number of criminal debt collection cases handled solely by USAO grew by 23 percent and the number of civil debt cases declined by 76 percent; (9) DOJ overall ability to obtain assistance from private counsel firms is threatened by the decreasing number of referred nontax civil debt cases and legislative requirements that require that at least four private counsel firms participate in the pilot program in each designated judicial district; and (10) DOJ cannot refer an adequate number of collection cases to private firms to meet program requirements because Education has virtually stopped sending delinquent student loan cases for collection.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: No action has been initiated.

    Matter: Because of the success of the pilot program and the flexibility it provides in addressing debt collection, Congress should consider allowing the Attorney General to contract with private counsel firms to collect delinquent nontax civil debt on an as needed basis.

  2. Status: Closed - Not Implemented

    Comments: No action has been initiated.

    Matter: Congress should consider expanding the Attorney General's authority to contract with private counsel firms to all federal judicial districts and not limit it to 15 districts as currently authorized.

  3. Status: Closed - Not Implemented

    Comments: No action has been initiated.

    Matter: Congress should consider deleting the requirement contained in 31 U.S.C. 3718(b)(1)(A) that the Attorney General use best efforts to contract with at least four private counsel firms in each district.

 

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