Debt Collection:

Navy Efforts To Collect Debts From Former Service Members

AFMD-86-51BR: Published: May 19, 1986. Publicly Released: Jun 6, 1986.

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Pursuant to a congressional request, GAO obtained information on the Navy's efforts to: (1) collect out-of-service receivables; (2) implement the Debt Collection Act of 1982; (3) improve its system of accounting for and controlling out-of-service receivables; and (4) address the problems cited in a 1981 GAO report.

GAO found that: (1) out-of-service receivables increased significantly while collection rates were relatively low; (2) increases in new receivables resulted from enlistment/reenlistment bonuses paid to service members who separated prior to earning the entire bonus; and (3) while the Navy has taken several actions to improve collection of out-of-service receivables and to address the problems cited, its current system cannot fully support implementation of the act and is not designed to account for all receivables. Although the act requires federal agencies to attempt collection for all amounts owed to the government, the Navy concluded that it was not cost-effective to attempt collection of receivables under $125. However, GAO believes that the $125 threshold appears to be high. The act also allows federal agencies to offset amounts owed against salaries of debtors who are employed in the federal government, but because of delays in implementing regulations, the Navy has not used this tool.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: Offset procedures for delinquent debtors commenced in June 1986. The out-of-service debt collection system was installed in June 1987. Offsets have been requested for all debts by Navy civilian employees and military personnel of other services. Offset requests for civilian personnel of other DOD components will be made when points of referral are provided by components.

    Recommendation: The Secretary of Defense should direct the Secretary of the Navy to ensure that delinquent amounts owed by former service members are offset against government salaries due.

    Agency Affected: Department of Defense


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