Agencies Fail to Collect $50B

amaxwell@govexec.com

Recent federal efforts to collect $50 billion in debts from individuals and businesses have met with minimal success and do not meet with the requirements of the Debt Collection Improvement Act of 1996, Rep. Carolyn Maloney, D-NY, said Wednesday.

But federal officials testifying at a hearing of the House Government Reform and Oversight Subcommittee on Government Management, Information and Technology said their efforts were starting to make a difference.

A report issued by Maloney, which was based on surveys sent to all departments, indicates that five agencies are responsible for the majority of non-tax debt owed to the federal government: the departments of Housing and Urban Development, Agriculture, Veterans Affairs, and Education; and the Small Business Administration.

The Debt Collection Improvement Act, written by Maloney in 1996, calls for debts more than 180 days old to be turned over to the Treasury Department for collection. Maloney's report gave Treasury an "F" for failing to provide the necessary leadership so agencies would comply with the law. In the year and a half since the law has been in place, only $2.5 million in delinquent debt has been collected.

"What I find most disturbing is the fact that the debt has increased from about $25 billion in 1985 to more than $50 billion in 1997," Maloney said. "We've handed the government departments the tools to clamp down on people who owe them money, yet they continue to let the debt pile up."

John D. Hawke, Treasury Department under secretary for domestic finance, said the department is "not satisfied with the extent or pace" of progress on debt collection. But he said Treasury's Financial Management Service has taken steps to address the situation. FMS has signed 24 letters of agreement with agencies to collect delinquent debts through cross-servicing arrangements, and has awarded contracts to 10 private collection agencies for collection of federal debts.

"Our goals for the future are to complete implementation of the DCIA at the earliest possible time and establish definitive targets for agencies to achieve compliance with these requirements," said assistant Treasury secretary Gerald Murphy.

Assistant Secretary of Education David Longanecker testified at the hearing that the challenge of collecting on defaulted student loans "is considerable because student loans are inherently risky . . . . Credit worthiness is not a prerequisite." Education has referred more accounts to Treasury than any other agency.

HUD has proposed that it join Treasury in a pilot project under which one of the department's debt management facilities would operate jointly as a Treasury debt collection center. "This potential transfer matches the skills in debt collection of current HUD staff with the need for Treasury to establish debt collection centers as required by DCIA," said HUD chief financial officer Richard Keezey.

Dale Sopper, acting deputy commissioner for finance, assessment and management at the Social Security Administration, said SSA for many years lacked the statutory authority to use various collection tools. SSA was excluded from legislation in 1982 allowing aggressive debt collection efforts. "SSA is now attempting to get on an equal footing with other government agencies," he said.

Rep. Maloney's Debt Collection Report Card

Agency Grade
Education C
Health and Human Services C
Veterans Affairs C
Energy C
Agriculture D
Housing and Urban Development D
Defense F
Environmental Protection Agency F
Export-Import Bank F
Small Business Administration F
Treasury F
Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download

When you download a report, your information may be shared with the underwriters of that document.