Download  

Department of the Interior

Effective Date: 12/3/84

Series: Financial Management

Part 344: Debt Collection

Chapter 1: General Policy and Responsibility

Originating Office: Office of Financial Management

1.1 General. The purpose of Part 344 is to provide general policy and guidelines in (a) the collection, compromise, suspension, and termination of collection action, and (b) the referral to the General Accounting Office (GAO), or to the Department of Justice (Justice) for litigation of debts due the Government for money or property. The following policy, standards, and guidelines are in conformity with the requirements of the Federal Claims Collection Act of 1966, 31 U.S.C. Secs. 3701-3719, as amended, and the standards issued by the Attorney General and the Comptroller General in Title 4, Chapter II of the Code of Federal Regulations (4 CFR, Parts 101-105), as amended.

1.2 Policy. The debt collection program for the Department will be comprehensive in scope and will provide for aggressive action on a timely basis with effective follow-up to collect all debts due the United States.

1.3 Responsibilities.

A. Department. The Office of Financial Management (PFM), Office of Assistant Secretary - Policy, Budget and Administration (PBA), is responsible for (1) furnishing policy and procedural guidance to implement regulatory directives and issuances, and (2) furnishing assistance and counsel to bureaus and offices (bureaus) in the administration of the collection of debts. The Office of the Solicitor (Solicitor) is responsible for the compromise of claims for money or property which do not exceed $20,000 exclusive of interest, penalties, and administrative cost arising out of the activities of any bureau prior to the referral of such claims to GAO or to Justice for litigation.

B. Bureaus and Offices.

(1) Internal Procedures. Pursuant to the requirements of the GAO Policy and Procedures Manual (4 GAO 68.3), each bureau is responsible for developing an internal collection program and prescribing procedures to ensure an orderly process of collection effort. This responsibility includes:

(a) Establishment and operation of a system including timely and aggressive demands upon a debtor.

(b) Determination of the amount and person(s) legally liable for the indebtedness.

(c) Provision for requesting the cooperation of other Federal agencies in the collection of amounts due the United States.

(d) Recommendation of compromise settlements to the Solicitor under the criteria and standards pursuant to 344 DM 4 and the delegation of authority by the Secretary (see 205 DM 7).

(e) Determination of administrative uncollectibility of debt and termination or suspension of collection effort (see 344 DM 5).

(f) Determination to refer debts to GAO or the Solicitor for transmittal to Justice where such debts may not be compromised, terminated, or 3uspended under the standards provided in 344 DM 4 and 5.

(g) Establishment and operation of a documented system of controls over receivables to ensure that the debt collection function is being carried out as accurately, efficiently, and economically as possible. Internal controls will provide for segregation of duties and functions between authorization, performance, recordkeeping, custody of resources, and review to provide checks on performance and to minimize unauthorized and improper acts.

(2) Control over Receivables. Internal control begins prior to the transaction that gives rise to the receivable. The events and conditions surrounding the delivery of goods, services, etc., that generate receivables should be controlled so that there is a reasonable assurance that the receivable will be collected in full. After the receivable has been created, the responsibility shifts to the control exercised over the conditions that may affect its collection value. Thus, methods of control require administrative procedures that provide adequate control over the receivables from the initial transaction to collection. After the controls have been established, the effectiveness of the controls will be measured by periodic examination rather than relying on a low loss ratio as a measure of such effectiveness.

(3) Aging Accounts and Loans Receivable. GAO requires the aging of receivables (see 2 GAO 12.4). By aging receivables, bureaus will be better able to identify amounts which may be past due Or those not past due and take positive action to collect these accounts. In preparing aging schedules, amounts are to be considered as delinquent if not paid within 30 days from the date of the invoice or if payment is not received by the due date prescribed on the invoice. Each bureau is to establish and maintain methods and procedures whereby, on a monthly basis, accounts and loans receivable, including accounts receivable for accrued interest, are aged by individual debtor in categories of: not delinquent; and delinquent in subcategories of:

1-30 days, 31-90 days, 91-180 days, 181-360 days, and over 360 days. Such categories will provide for summaries of (a) total amounts due from debtors, and (b) total number of accounts.

(4) Accounts and Loans Receivable Reserves. Bureaus are to establish and maintain reserves for losses on accounts and loans receivable as required in 2 GAO 12.4 and in a manner consistent with the guidelines issued by GAO that specify more definite accounting and reporting procedures for reserves under 2 GAO 12.4. Regular estimates (at least quarterly) are to be made for receivables that are not collectible. Such estimates will be accounted for and disclosed separately. On financial statements, the balance of the reserve accounts are to be shown as a deduction from the appropriate receivable account to arrive at the amount of such accounts expected to be collected.

1.4 Fraud, Antitrust, and Tax Claims Excluded. The provisions of this Chapter do not apply to the handling of any claim where there is (a) an indication of fraud, (b) the presentation of a false claim, (c) misrepresentation on the part of the debtor or any other party having an interest in the claim, or (d) a claim based in whole or in part on conduct in violation of the antitrust laws, unless the claim has been referred to Justice and is returned to this Department for further handling. Only Justice has authority to compromise, suspend or terminate collection action on such claims. Tax claims, as to which differing exemptions, administrative considerations, enforcement considerations, and statutes apply, are also excluded from the coverage of this Chapter.

1.5 Conversion Claims. Nothing contained in this Chapter is intended to deter demanding the return of specific property or from demanding, in the alternative, either the return of property or the payment of its value.

1.6 Subdivision of Claims Not Authorized. A debtor’s liability arising from a particular transaction or contract will be considered as a single claim in determining whether the claim is one of less than $20,000, exclusive of interest, penalties, and administrative costs, for the purpose of compromise, suspension, or termination of collection action (see 344 DM 4 and 5). Such claim may not be subdivided to avoid the monetary ceiling of $20,000 established by the Federal Claims Collection Act of 1966, 31 U.S.C. Sec. 3711(a)(2).

1.7 Required Administrative Proceedings. Nothing contained in this DM is intended to require the head of a bureau to omit or foreclose administrative proceedings required by contract or by law.

1.8 Compromise, Waiver, or Disposition Under Other Statutes. The standards set forth in this Chapter will be followed in the disposition of civil claims by collection, compromise or termination of collection action (other than by waiver pursuant to statutory authority) under statutes other than the Federal Claims Collection Act of 1966, 31 U.S.C. Secs. 3701-3719, as amended by the Debt Collection Act of 1982, to the extent such other statutes or authorized regulations issued do not establish standards governing such matters.

*

12/3/84 #3435

Replaces 12/3/84 #2607

Replaces 11/20/81 #2365