This regulation revises established Department policy for write offs of uncollectible claims or debts in agency accounts to reflect increased agency authority to compromise debts, and suspend or end collection action. If the head of an agency of the Department adopts regulations separate from this regulation pursuant to independent statutory debt settlement authority, the procedures thereby established, rather than those set out in this regulation, shall be followed for the collection of the claims and debts to which the separate regulations apply.

Prior to the enactment of the Federal Claims Collection Act of 1966 (FCCA), Pub. L. No. 89-508, the authority to compromise and suspend or end collection action on debts owed to and claims in favor of the Government rested solely with the Attorney General of the United States. Under the FCCA, Federal agencies received the authority to compromise debts and claims, as well as to suspend or end collection action on debts and claims with principal amounts (i.e., exclusive of interest, penalties, and administrative costs) of no more than $20,000 and that did not involve fraud, misrepresentation, false claim, or mutual mistake of fact [31 U.S.C. 3711 (a) (2); 3711(d)]. Under section 8(b) of the Administrative Dispute Resolution Act, Pub. L. No. 101-552, enacted November 15, 1990, this amount was increased to $100,000.

Absent statutory authority setting forth a higher agency limit, the authority to compromise, suspend or terminate Federal agency debts and claims in excess of $100,000 remains with the Attorney General of the United States. The Attorney General also retains sole authority to compromise and suspend or end collection action regarding debts and claims involving fraud, misrepresentation, false claim, or mutual mistake of fact.

This regulation supersedes Departmental Regulation 2130-6, dated November 18, 1986.

Agencies must implement write off procedures that identify and remove uncollectible debts or claims from accounts receivable in a timely manner after all currently available means of collection have been exhausted.

Agency heads or their designees may write off uncollectible debts or claims that have a principal amount not exceeding $100,000 and that do not involve fraud, misrepresentation, false claim, or mutual mistake.

Agency requests for compromise, suspension or termination of collection action with regard to debts or claims with a principal amount between $100,000 and $500,000 and that do not involve fraud, misrepresentation, false claim, or mutual mistake, should be referred to the Office of the General Counsel for transmittal to the United States Attorney in whose judicial district the debtor can be found. Claims in excess of $500,000 should be referred to the Office of the General Counsel for transmittal to the Commercial Litigation Branch, U.S. Department of Justice.

Agency requests for compromise, suspension or termination of collection action with regard to debts or claims of any principal amount involving fraud, misrepresentation, false claim, or mutual mistake, shall be referred to the Office of the General Counsel for transmittal to the Commercial Litigation Branch, U.S. Department of Justice.