FAM No. 2003-22 (Minimum Debt Collection Threshold)
September 30, 2003
FINANCIAL ADMINISTRATION MEMORANDUM NO. 2003-022 (II.J)
To: Bureau Assistant Directors, Administration
Director, National Business Center
Bureau Finance Officers
Finance Officer, Financial Management Services
Director of Acquisition and Property Management
From: Theodore Woronka, Deputy Director /s/
Office of Financial Management
Subject: Minimum Debt Collection Threshold
The purpose of this Financial Administration Memorandum (FAM) is to establish
a minimum threshold for pursuing collection of certain types of debts. Title 31
CFR 903.3(a)(3) gives discretionary authority to Heads of Agencies to end
collection action on a claim when the cost of collection exceeds the amount to
be recovered. The cost of establishing an accounts receivable, issuing a bill,
implementing due process requirements and processing a cash collection was
determined to be approximately $50. Thus, whenever the total combined debt for
a debtor is $50 or less and the principal amount of the debt is not expected
to exceed $50 during the next 12 month period, the debt may be waived or
terminated without pursuing collection.
Debt cancellations/waivers are to be documented and approved within established
delegation of authority limits established in Part 205 Departmental Manual (DM)
Chapter 7, posted in a bulk transaction to the appropriate receivable accounts,
and immediately written off through the appropriate allowance for doubtful
accounts. In this manner, there will be an audit trail of these transactions
and a basis to determine if revisions are warranted.
The threshold herein does not apply to debt of current employees. Current
employees are expected to repay valid debt or, if necessary, the amount will be
deducted from his/her salary payment. Also, the threshold does not apply to
statutory or regulatory required fees, such as fines. The guidance provided by
this FAM is established in accordance with the Department of Interior’s
Departmental Manual (Part 344 DM Chapters 5 & 9) and is effective
immediately.
Should you have questions or require additional information regarding this
matter, please contact Bill Webber on (202) 208-5684.
