Improving Government Debt Collection Operations

Methods Federal agencies can use to improve their debt collection operations were discussed. As of September 30, 1977, the amount owed the Government was about $118 billion. Of this total, $76 billion was owed by U.S. citizens and organizations, and $42 billion was owed by foreign governments and concerns. Prompt collection action from the public has been hindered by: (1) a lack of prompt and aggressive collection action; (2) low or no interest charges being imposed on delinquent accounts; and (3) inaccuracies in accounting for and reporting accounts receivable, including inadequate allowances for bad debts. The Secretary of Health, Education and Welfare and the Administrator of Veterans Affairs should report information on loans, repayments, and defaults to the credit bureau network when they are incurred; and make arrangements to use the debtor locator services offered by credit bureaus and other firms and evaluate the cost benefit of these services. On an overall government-wide basis, agencies should establish procedures to identify the causes of overpayments, delinquencies, and the corrective actions needed. Also, the agencies should establish better control over receivables and take more agressive collection action.