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By Rita Bratcher, Assistant Commissioner, Debt Management Services

It’s hard to believe that a year has passed since I last addressed you. I thought my first year as FMS’s Assistant Commissioner for Debt Management Services was exciting – little did I know what was in store for year two! Working hand in hand with our customer agencies, we’ve had a banner year in collecting delinquent debt, over $5.9 billion from all collection tools and sources in FY 2008. This includes $1.5 billion from offsets of the Economic Stimulus Payments. What is remarkable to me is the fact that nearly 60 percent, or $3.5 billion, of the total delinquent debt collections represented delinquent child support. It is gratifying to know that we are able to help so many children in America.

A year ago, I mentioned that we were working with the Internal Revenue Service (IRS) and the Centers for Medicare and Medicaid Services to develop a pilot to levy payments made to Medicare providers that are delinquent in paying federal taxes. Well, after a year of hard work and dedication, the first levy transactions in this pilot began the first full week of October. Due to the extremely large volume of payments to Medicare providers, these transactions will be phased-in throughout FY 2009.

Also, during the first week of October, we implemented a new accounting system called “FACDR” (Financials, Accounting, Collections, Disbursements, and Reconciliations), which tracks, posts, and reports the accounting activity for delinquent debt collections. The FACDR system uses the Oracle Federal Financials application, which is a Financial Systems Integration Office approved administrative accounting system. FACDR was developed by the Department of Interior’s National Business Center. Federal agencies that refer delinquent debts to FMS will benefit from this new FACDR system due to improvements in the timing of Intra-Governmental Payment and Collections (IPAC) processing, more efficient payments and collections, real-time activity postings, and overall quality. What I found truly amazing was that this entire system development effort took only nine months to complete – nine months that were also filled with reconciling suspense transactions so we could begin FY 2009 with an in-balance condition – what a feat!

Successfully debuting in September 2008 was the Treasury Offset Program (TOP) Web Client, also known as the Debt Common Client. This project was a rewrite of the current TOP PowerBuilder interface to a Web interface. This web-enabled version is a single sign-on application that provides federal program agencies access to TOP via the internet. Benefits of the TOP Web Client include: elimination of a dedicated phone line, a similar look and feel of the FedDebt web client, and a single sign-on for both TOP and FedDebt. Other enhancements are left margin navigators for easier mobility between screens; reports that are available in PDF; and, the ability to defer running reports.

As you can see, it has been a very productive year. I would like to thank the employees of DMS for their hard work, dedication, and energy in achieving these results. I would also like to recognize the support and cooperation of the federal program agencies. Without them, our efforts would not be successful.

One collection tool that we believe has enormous potential and that we will be focusing on in FY 2009 is the use of Administrative Wage Garnishment (AWG). As authorized by the Debt Collection Improvement Act of 1996 (DCIA) (codified at 31 U.S.C.3720D), AWG allows federal agencies to garnish up to 15 percent of the disposable pay of debtors who do not work for the federal government. A court order is not required and employers must comply with the AWG order. Collections through the use of AWG have been very successful for the participating federal program agencies. From FY 2001 through FY 2008, the AWG program has collected over $24.2 million with 20 active agencies. To implement AWG, an agency must complete three simple steps: issue regulations stating the agency is adopting FMS’s regulations; establish hearing procedures; and appoint a hearing official. .

You will be hearing more about AWG in the coming months. Please feel free to contact us if you have any suggestions for improvements in debt collection or if we can help in any way to increase delinquent debt referrals.

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