Improving Government Collection of Amounts Owed by the Public

As of September 30, 1977, the public owed the Government about $118 billion resulting from tax assessments, sale of Government services and goods, overpayments, and loan programs. A large portion of this debt requires collection action, and a substantial amount will be uncollectible under existing collection methods. A review of Government accounts receivable revealed that collection action has been hindered by: lack of prompt and aggressive collection action, low or no interest charges being imposed on delinquent accounts, and inaccuracies in accounting for and reporting accounts receivable. Agencies have taken some corrective actions in response to GAO recommendations. The Federal Government could achieve significant improvement in debt collection by using selected private sector practices such as: reporting debts to credit bureaus, using the credit bureau debtor locator service to find delinquent debtors, improving the content of demand letters, and making greater use of automation. Recommendations were made to test these commercial practices through action on defaulted student loans and educational assistance overpayments.