Agencies told to improve debt collection efforts

Federal agencies need to do a better job of referring delinquent debts to the Treasury Department on time, witnesses at a House Government Reform Subcommittee hearing said Thursday.

The Debt Collection Improvement Act (DCIA) of 1996 requires agencies to refer non-tax debts that have been delinquent for more than 180 days to the Treasury Department. Non-tax related debts include defaults on loans provided to students, small businesses and homebuyers. Debt delinquencies also occur when an agency overpays federal beneficiaries and vendors.

At the end of fiscal 1999, the federal government was owed almost $60 billion in such debts.

The Treasury Department's cross-servicing program, which allows the department to collect debts directly from debtors or refer them to a private collection agency, and its Financial Management Service (FMS), which runs the cross-servicing program and also recovers delinquent debt through other programs, aren't working effectively, witnesses said.

"For these programs to work, agencies must refer their delinquent debts to Treasury in a timely fashion. That is not always the case," said Stephen Horn, R-Calif., chairman of the Government Management, Information and Technology Subcommittee.

Agencies' recent focus on Y2K conversion as well as difficulty in identifying debts eligible for cross-servicing are among the reasons for delays, said Gary T. Engel, associate director of accounting and financial management issues at the General Accounting Office.

The longer agencies wait to refer debts to FMS, the more costly the debts become to the government, witnesses said.

"Time is money," said Barry G. Cloyd, chairman of the Government Services Program at the American Collectors Association Inc. After two years of delinquency, only about one percent of debts are collected, according to an analysis by PricewaterhouseCoopers.

Cloyd offered several suggestions for improving the federal debt collection system. He said the Treasury Department should be given greater enforcement power on the issue, and that multiple debts from the same individual or organization should be consolidated so that different contractors are not contacting the same debtors over and over.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

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

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • 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.

  • 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.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • 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.

  • 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

  • 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.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


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