Debt Collection

Navy Efforts To Collect Debts From Former Service Members Gao ID: AFMD-86-51BR May 19, 1986

Pursuant to a congressional request, GAO obtained information on the Navy's efforts to: (1) collect out-of-service receivables; (2) implement the Debt Collection Act of 1982; (3) improve its system of accounting for and controlling out-of-service receivables; and (4) address the problems cited in a 1981 GAO report.

GAO found that: (1) out-of-service receivables increased significantly while collection rates were relatively low; (2) increases in new receivables resulted from enlistment/reenlistment bonuses paid to service members who separated prior to earning the entire bonus; and (3) while the Navy has taken several actions to improve collection of out-of-service receivables and to address the problems cited, its current system cannot fully support implementation of the act and is not designed to account for all receivables. Although the act requires federal agencies to attempt collection for all amounts owed to the government, the Navy concluded that it was not cost-effective to attempt collection of receivables under $125. However, GAO believes that the $125 threshold appears to be high. The act also allows federal agencies to offset amounts owed against salaries of debtors who are employed in the federal government, but because of delays in implementing regulations, the Navy has not used this tool.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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