Date: October 12, 1995
Part 263: Debt Recovery
Originating Office: Division of Finance
2.1 Purpose. This chapter provides guidance to Collection Officers of the requirements of debt collection in order to ensure compliance with the Debt Collection Act, Department of Treasury, Department of Justice, and General Accounting Office policies.
A. 344 DM 2, Guidance for Collection Efforts.
B. 31 U.S.C. 3701-3719, Claims of the United States Government.
C. 28 U.S.C. 2415, Time for commencing actions brought by the United States.
D. 4 CFR, Parts 91-92, Subchapter G, Standards for waiver of claims for erroneous payment of pay and allowances, and of travel, transportation, and relocation expenses and allowances.
E. Treasury Financial Manual, Chapter 8000.
A. Chief, Division of Finance (DF). The Chief, Division of Finance functions as the Service's debt management officer by promulgating all regulatory and administrative directives to the Finance Center and Regional Offices. The Chief, DF serves as the agency's Debt Collection Coordinator (DCC) in matters relating to the Department's debt collection contract including receipt and control of uncollectible accounts submitted to the contractor; receipt and dissemination of collection data from the contractor; and computation and approval of commission payments to the contractor. The Chief, DF serves as focal point for agency referrals to consumer reporting agencies, the Solicitor, the GAO, and Department of Justice; and coordinates the preparation and submission of Servicewide reports in those cases where the data required are not available from a single Service source.
B. Service's Finance Center. The Service's Finance Center performs regulatory accounting and reporting functions such as:
(1) Issues bills for collection and delinquency notices for amounts due the Service from State and local governments, travel advances for separated employees, unused airline tickets purchased with Government Transportation Requests, duplicate or otherwise erroneous payments to vendors and employees, non-entitlement payments made on behalf of employees during their relocation, and all employee or miscellaneous indebtedness arising at the Headquarters level.
(2) Issues all SF-1080, SF-1081, and On-line Payment and Collection System (OPAC) billings to other Federal agencies regardless of the origin and nature of the indebtedness. (Under no circumstances are Headquarters, Regional or Field Offices to issue an SF-1080, SF-1081, or OPAC.)
(3) Sends uncollectible account reports and supporting information on above indebtedness to agency DCC for forwarding to Department debt collection contractor. Refers case reports on these uncollectible debts for writeoff authority or a Claims Collection Litigation Report to the Division of Finance for referral action on compromise, suspension, or termination of collection, as appropriate.
C. Regional Finance Offices assign/designate Regional Collection Officers and their alternates and ensure that their Regions carry out the duties of the Service debt collection as listed below.
(1) Maintain a collection and alternate collection officers listing and review the listing annually to assure currency.
(2) Approve and revoke collection officers and/or alternate officers for the Region.
(3) Serve as Regional contact point for debt collection policy.
(4) Oversee the implementation of payroll deduction for employee's payroll offset.
D. Collection Officers are responsible for the collection of debts to the Government at their field, Regional, or Headquarters level.
2.4 Designation of Collection Officer (Regional/Field). Before a person can process collections, they must be so designated as a Collection Officer by their Regional Finance Officer. (See Exhibit 1.)
A. Designation/Revocation. Nominees for collection/alternate officer should not be the primary or alternate imprest fund cashier. The originating office will prepare a designation memorandum as illustrated in 260 FW 1 requiring that the designee sign and submit the form to the Regional Finance Office for approval. After designation has been made the new collection/alternate officer may issue bills on behalf of the Service and collect payments. Designation as a field station collection officer will be revoked prior to designation of a replacement collection officer. (See Exhibit 2.)
B. Annual Certification. Annual certification of the accuracy of the designations for collection officers will be completed by the Regional Finance Officer. A memorandum to the Project Leader similar to Exhibit 3 may be utilized.
2.5 Safekeeping Requirements. Collections not immediately transmitted to the Finance Center or deposited in a bank designated by the Department of the Treasury as a Federal depository, must be kept safe and segregated from other funds kept at the site. Co-mingling of imprest funds with collections is not allowed. Collections will be kept in a separate safe drawer, lockbox or file cabinet with a combination lock and lock-bar. Each collection officer is responsible for protection of collections against theft or loss and at no time should the funds be left unattended when not in a secure location. Detailed accounting records should be kept with the amount collected until the cash is deposited with a banking institution or converted to a money order for transmittal to the Finance Center.
2.6 Demand for Payment.
A. To demand payment a Bill For Collection, DI-1040, will be issued to a debtor of the Service informing the debtor of the basis of the debt and consequences of his/her failure to pay. Three progressively stronger follow-up demands will be sent by the Finance Center over a period of not more than 60 days notifying the debtor of his/her obligation.
(1) Initial Demand. Initial bills are prepared on a Bill for Collection, DI 1040, and inform the debtor of the basis for and amount of the indebtedness. The description of the debt should show computations, if appropriate, and give references to contracts, permits, agreements, surveys, etc. The bill must cite a payment due date (in most cases, not more than 30 days after the date of the bill) and state the requirement to assess interest, penalty and administrative charges on late payments. Employee debtors must be advised of their right to question the indebtedness. See sample billing, Exhibit 4, for recommended wording of these requirements. The Bill for Collection bill number is assigned a Collection Control Number (CCN) from the Collection Control Register. The CCN is unique to each bill issued and is to be used on documents for all stages of the billing and collection process. The accounting copy of the bill is sent to the Finance Center to be recorded as an account receivable in FFS.
(2) Subsequent Demands. When the debt is not paid or if a repayment program acceptable to the Service has not been arranged with the debtor by the due date, then the initial bill will be followed by two progressively stronger bills at not more than 15-day intervals, unless a response to the initial or subsequent demands indicates that further demands would be futile and a rebuttal to the response is not required. However, in determining the timing of the bills, regard must be given to the need to act promptly so that referrals to Department of Justice (DOJ) or General Accounting Office (GAO) for litigation are made within a year of the determination. (See Exhibits 5 and 6.)
(3) Debtor Notices. As appropriate, the billing office may include in the initial Bill for Collection, or the Finance Center in subsequent demands, a willingness to discuss alternative methods of payment (except for collection of outstanding travel advances), policies with respect to the use of consumer reporting agencies, the use of collection services, its intention to refer the debt to DOJ or GAO for litigation, and depending on applicable statutory authority, the debtor's entitlement to consideration of waiver.
(4) Contract Claims. If a claim arises from a contract executed before, and in effect on October 25, 1982, the initial and subsequent demands shall not mention the imposition of penalties or interest.
(5) Waiver of Subsequent Written Demands. To protect the Service's interest, if there is a valid reason, the sending of a second or third demand letter may be waived and other appropriate actions under this chapter may be taken, i.e., to keep the 1-year Statute of Limitations in 28 U.S.C 2415 from expiring.
B. Interest and Penalties. Except when prohibited or expressly provided by law, interest, penalties, and administrative charges will be assessed at a rate established by the Secretary of the Treasury.
C. Uncollectible Debt. When a debtor fails to pay a debt owed the Service after having received the initial demand and follow-up demands, the debt will be considered uncollectible. The disposition of uncollectible debts will be conducted by the Finance Center.
D. Communications from the Debtor. Communication from a debtor will be responded to within 10 working days after receipt by the billing office. Debtors who dispute a debt will be advised to furnish available evidence to support their claim.
2.7 Federal Employee. 5 U.S.C. 5514 provides for recovery of erroneous payments to and other debts owed by employees of the United States by deduction from current salary.
A. Collection by Salary Offset. Collection by salary offset will be initiated if a current Federal employee has a delinquent debt to the Service. The employee's salary will be offset by an amount not to exceed 15 percent of disposable pay to satisfy that indebtedness. Initiation of salary offset will be coordinated by the Regional Finance Officer.
B. Travel Advance Repayment. Departmental policy requires that the repayment of travel advances be made in a lump sum. When the employee fails to make repayment of a travel advance, full recovery of the debt may be made by offset against accrued pay, compensation, amount of retirement credit, or other amount due the employee, and is not subject to the 15 percent limitation placed on salary offset.
C. Employee Training Expenses. Employees who have signed a training agreement to remain in Government service for a period of time equal to a period of training at a non-Government facility and leave Government service prior to completion of that length of service, must repay expenses incurred by the Government. When the employee fails to make repayment for training expenses, full recovery of the debt may be made by offset against accrued pay, compensation, amount of retirement credit, or other amount due the employee and is not subject to the 15 percent limitation placed on salary offset.
D. Civil Service Retirement and Disability Fund Offset. When the debtor is a former employee of the Federal Government, and all other means of recovery have been exhausted, collection by administrative offset against the Civil Service Retirement and Disability Fund will be initiated.
2.8 Waiver of Debts Arising from Erroneous Payments of Pay and Allowances to Employees. As amended, 5 U.S.C. 5584 authorizes the waiver, under specific conditions, of claims arising out of erroneous payments of pay and allowances to employees of the Service. Provisions under this sub-paragraph do not include travel and transportation expenses and allowances or relocation expenses.
A. Conditions for Waiver. A written request for waiver must be received by the Service within three (3) years after the erroneous payment of pay or allowances is discovered. The erroneous payment must have been through administrative error with no indication of fraud, misrepresentation, fault, or lack of good faith by the employee. Any significant unexplained increase in pay or allowance which would require a reasonable person to make an inquiry concerning the correctness of the pay or allowance received, would preclude a waiver if the employee fails to bring the matter to the attention of appropriate officials.
B. Authority to Grant Waiver. The Assistant Director - Policy, Budget and Administration (APBA) can grant a waiver, in whole or in part, which does not exceed $1,500, inclusive of any repayments already made by the employee. The claim must not be the subject of an exclusion by a Comptroller General's decision, already referred to the General Accounting Office for collection or the Attorney General's office for litigation. The APBA may refuse to grant a waiver for any amount. When the total of the Service claim against the employee is over $1,500, the employee is advised of his right to appeal the APBA's decision to the Comptroller General.
C. Procedures for Granting a Waiver. Application for waiver or refund shall be submitted to the APBA through the Assistant Regional Director - Budget and Administration. Any application shall be considered for waiver provided it is received within the time limitations and has not been previously considered for waiver.
(1) All claims by the Service considered for waiver shall be investigated by the responsible Region's Assistant Regional Director - Budget and Administration.
(2) A report of the investigation will be provided the APBA and will include:
(a) A statement of the aggregate amount of the erroneous payments supported by a reference to the pay record or voucher or sub-vouchers upon which the claim is based;
(b) A statement showing the circumstances under which the erroneous payment was made, the date it was discovered, and whether it was subject to an exception made by the Comptroller General;
(c) A statement as to whether there is any indication of fraud, misrepresentation, fault, or lack of good faith on the part of the employee or any other person having an interest in obtaining a waiver to the claim;
(d) A statement by the employee as to his/her knowledge of the overpayment; and,
(e) Any other factual information in possession of the Service such as payroll change slips, personnel action forms, leave and earnings statements, indoctrination, or other instructions indicating knowledge on the part of the employee concerning the possibility of having received an erroneous payment.
(3) The report of investigation will be forwarded to the Chief, Division of Finance. The Division of Finance will determine the reason for the erroneous payment of pay and allowances and the action necessary to prevent similar erroneous payments. The Division of Finance will forward its findings to the APBA with its recommendations for or against waiver of the debt.
(4) The APBA may grant or deny a request for administrative waiver for claims against an employee of less than $1,500. The APBA will forward to the Comptroller General any request for administrative waiver for claims against an employee of more than $1,500 where the APBA recommends approval of the waiver. APBA may deny a request for administrative waiver for claims against an employee for any amount, provided the employee is informed of his right to appeal the denial to the Comptroller General. The APBA may forward any request for administrative waiver for claims against an employee where the APBA has doubt as to whether a waiver is proper, setting out the basis for the doubt.
(5) If the APBA has considered and denied a request for waiver of a claim that is subsequently referred to the General Accounting Office, the APBA shall so advise the General Accounting Office when referral for collection is made. No claim by the Service can be referred to the Attorney General for litigation while it is under consideration for waiver unless the filing deadline does not permit such waiver consideration prior to referral.
(6) The Division of Finance will prepare written notification for the APBA's signature to all parties concerned as to final action taken on a request for administrative waiver of a claim by the Service against an employee.
(7) Refund of any amount paid by the employee to the Service for a claim initiated by the Service that has been waived in whole or in part shall be disbursed to the employee provided the employee makes claim to the Service within 2 years following the date of the waiver. Refunds shall be charged to the appropriation from which the erroneous payment was made.
(8) The Division of Finance shall maintain a written record that includes the report of investigation, a detailed account of corrective action taken, an account of the waiver action taken and the reasons for such action, and other pertinent information as to the action taken upon application for refund. The Division of Finance shall maintain a registry that shows the disposition of each claim by the Service that was considered for waiver. The written record and registry will be available for review by the General Accounting Office.
2.9 Suspension or Revocation of License or Eligibility.
A. When seeking the collection of statutory penalties, forfeitures, or debts provided for as an enforcement aid or for compelling compliance, collection officers will give serious consideration to the suspension or revocation of licenses or other privileges. Such action will be taken for any inexcusable, prolonged, or repeated failure of a debtor to pay such a claim and the debtor will be so advised on the initial or subsequent bill.
B. The failure of any surety to honor its obligations in accordance with 31 U.S.C. 9305 will be reported by the Finance Center to the Department of Treasury (Treasury) at once. Notification that a surety's certificate of authority to do business with the Government has been revoked or forfeited by the Department of the Treasury will be forwarded by that Department to all interested agencies.
2.10 Collection in Installments.
A. Scope and Application. Debts, including interest, penalties, and administrative costs will be collected in one lump sum whenever possible. However, if the debtor is financially unable to pay the indebtedness in one lump sum, payment may be accepted in regular installments. Financial statements should be obtained from debtors, except employees, who represent that they are unable to pay the debt in one lump sum. Agreements between the Service and a debtor to accept regular installments should be a legally enforceable written agreement from the debtor which specifies all terms of the arrangement and which contains a provision accelerating the debt in the event the debtor defaults. The size and frequency of the installment payments will bear a reasonable relation to the size of the debt and the debtor's ability to pay. If possible, the installment payments will be sufficient in size and frequency to liquidate the Service's claim in not more than 3 years. Installment payments of less than $100 per month should be accepted only in the most unusual circumstances. Employees may elect salary offset.
B. Unsecured Debts.
(1) To collect an unsecured debt when the total of the deferred installments will exceed $750, the Finance Center will attempt to obtain from a debtor an enforceable promissory note. Such notes may be sought when an unsecured debt of a lesser amount is involved. The Finance Center should explain to the debtor in writing the consequences of signing the note and request a document from the debtor acknowledging the voluntary signing of the note.
(2) Installment payments may be accepted notwithstanding the refusal of a debtor to execute a promissory note or to give other security.
C. Multiple Debts. If the debtor owes more than one debt and designates how a voluntary installment is to be applied among those debts, that designation must be followed. If the debtor does not designate the application of the payment, payment will be applied in accordance with the best interest of the Service, as determined by the facts and circumstances of the particular case, paying special attention to applicable statutes of limitations.
2.11 Exploration of Compromise. Attempts will be made to effect compromises (preferably through personal interviews) of claims of $20,000 or less, before application of interest, penalties, and administrative costs. This action may be taken in cases other than repayment of travel advances where it can be ascertained that the debtor's financial ability will not permit payment of the claim in full, or in which the litigation risks or the costs of litigation dictate such action.
2.12 Interest, Penalties and Administrative Costs.
A. Scope and Application. Interest, penalties, and administrative costs will be assessed on delinquent debts owed the Service. However, before assessing these charges, written notice must be mailed or hand delivered to the debtor explaining the requirements concerning the charges.
B. Interest. The rate of interest charged debts will be the rate set by Treasury on the day the initial bill is mailed to the most current address of the debtor available to the collection officer, and remains fixed at that amount for the duration of the indebtedness. No interest will be assessed for bills paid within 30 days from the mailing date of the initial bill. No interest shall be assessed against other interest, administrative or penalty charges that may have accrued against the indebtedness. However, if the debtor defaults on a pervious payment agreement, charges which accrued but were not collected under the defaulted agreement will be added to the principal to be paid under the new agreement.
C. Penalty Charges. A penalty charge shall be assessed at the rate of 3 percent per annum on the portion of a debt which remains unpaid 90 days after the date of the bill for collection. Penalty charges will not be calculated until the 91st day of delinquency, but will accrue from the first day the debt becomes delinquent (30 days after the date of the initial bill). No penalty charge will be made if the debtor has entered into a satisfactory repayment agreement.
D. Administrative Charges. Administrative charges are to cover the administrative cost incurred as a result of a delinquent debt. These are the additional costs incurred in processing and handling the debt because it became delinquent. An administrative charge of $8.00 will be assessed for each additional bill sent to a debtor after the initial bill. Administrative charges may include the cost of a collection agency to the extent the fees are attributable to the delinquency.
E. Waiver of Interest, Penalties and Administrative Costs. The collection of interest on a debt or any portion of a debt which has been paid within 30 days after the date interest charges were initiated shall be waived. On a case-by-case basis, this 30-day period may be extended if it is determined such action would be appropriate. The collection of interest, penalties, and/or administrative costs may be waived in whole or in part.
F. Payments. When a debt is paid in installments, the payments will first be applied to administrative cost and penalty charges; second, to accrued interest; and third, to outstanding principal.
G. Exemptions. The assessment of interest, penalty and administrative charges do not apply to the following:
(1) Debts arising under contracts which were executed prior to and were in effect on October 25, 1982;
(2) Debts where an applicable statute, regulation required by statute, loan agreement, or contract either prohibits such charges or explicitly fixes the charges that apply to the debts involved; or,
(3) Debts arising under the Social Security Act, the Internal Revenue Code of 1954, or the tariff laws of the United States. Interest and administrative charges will be assessed to the extent authorized under the common law or applicable statutory authority other than 31 U.S.C. 3717.
H. State and Local Governments. The provisions of this sub-part do not apply to State and local governments. However, interest is to be charged on debts owed the Service by State and local governments to the extent there is common law or statutory authority that provides for assessment of interest, penalty, or administrative charges.
2.13 Automation. Whenever possible, the Federal Financial System (FFS) should be utilized to initiate, track, and follow-up collection efforts.
2.14 Prevention of Overpayments, Delinquencies, and Defaults. Procedures will be in place to identify the causes of overpayments, delinquencies, and defaults and the corrective actions needed to prevent these identified items.
2.15 Regional/Field Office Duties.
A. Regional/Field Office Billings. Regional and field offices must issue the initial Bill for Collection on amounts due for contractor defaults, property lost or damaged by an employee, special use permits, cooperative farming agreements, recreational user fees, reimbursable animal damage control projects, quarters rental not collected through payroll deduction, etc. Title 2 GAO 12, Accounting, requires that all receivables be promptly recorded into the accounting records of the agency. Therefore, it is mandatory that the accounting copy of every Bill for Collection prepared by a Regional or field office be forwarded on the same day as issued to the Finance Center, Attn: Cost Accounting Section. The Finance Center will record the receivable into FFS and the responsibility for follow-up and collection will be assumed by the Finance Center.
B. Regional/Field Office Collections will be forwarded to the Service's lockbox for centralized deposit. The lockbox address is as follows: U.S. Fish and Wildlife Service, P. O. Box 840114, Dallas, Texas 75284-0114.
C. Collection Transmittal. Originating offices prepare an original and three copies of the Collection Transmittal (FWS Form 3-2061): one copy is kept at the originating office, and the original and two copies are used to transmit collections to the lockbox. A confirmed copy of the transmittal will be returned to the station. The transmittal must be completed accurately and with sufficient explanation and detail to classify and deposit the collection to the proper account. Collections must appear in the section of the transmittal that properly identifies the collection.
D. Previously Billed Collections. If the receipt is a collection of an amount previously billed by the station, assign the same Collection Control Number (CCN) to the Collection Transmittal Form 3-2061 as used on the Bill for Collection. Forward a copy of the bill with the collection transmittal. If the receipt is a collection of an amount not previously billed, assign a new CCN to the Form 3-2061.
E. Multiple Collections. Originating offices must include only one type of collection per transmittal. Collections of the same type may be included on a transmittal with a listing attached showing each remitter's name, address, check or money order number, and amount. Form 3-2061A, available from the Finance Center, may be used in these cases.
F. Transmittal of Collections to the Finance Center. Collections by field stations must be transmitted promptly to the lockbox for centralized deposit. Collections of more than $1,000 must be forwarded on a daily basis. Receipts of less than $1,000 may be accumulated and forwarded when the total reaches $1,000; however, receipts will be forwarded no less frequently than weekly regardless of the amount accumulated.
G. Cash Collections. Cash collections must be converted to a money order or a bank draft made out to the U. S. Fish and Wildlife Service before mailing. Money order fees for this purpose may be paid from Imprest Funds and charged to the proper appropriation. A money order fee may not be deducted from the amount of the collection proceeds.
H. Repayment - Appropriation Refund. Refunds are repayments for excess, erroneous, or duplicate payments and are credited to the appropriation or account (subactivity) from which the disbursement was originally made. Refunds must be directly related to previously recorded disbursements and are reductions of such disbursements. Refunds for payments made in a prior fiscal year are credited to the fiscal year in which the payment was made.
I. Travel Advance Collections. To insure that the employee submitting the travel advance repayment gets credit, the social security number, travel type and the travel authorization number for which the advance was issued must be shown.
2.16 Reporting. Receipt transactions are recorded into FFS and shown on the monthly Office Obligations Transaction Report (OOTR) or the Office Revenue Transactions Report (ORTR). All offices should review the OOTR and the ORTR monthly to verify collection transactions for proper classification and amount. Discrepancies should be promptly reported to the Regional Finance Office.
For additional information regarding this policy, contact the Division of Financial Management. For more information on this Web page, contact Krista Holloway, in the Division of Policy and Directives Management.