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Debt Collection: Treasury Faces Challenges in Implementing Its Cross-Servicing Initiative

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Report Type Reports and Testimonies
Report Date June 8, 2000
Report No. T-AIMD-00-213
Subject
Summary:

This testimony discusses the Department of the Treasury's progress in implementing the cross-servicing provision of the Debt Collection Improvement Act of 1996. The act includes several tools to facilitate collection of defaulted obligations to the federal government. GAO focuses on the collection of nontax delinquent debt. Among the options available for recovering these debts are Treasury's consolidated federal payment offset program; wage garnishment; and the transfer of nontax debt over 180 days delinquent to Treasury for collection, known as "cross-servicing." GAO discusses (1) the status of nontax delinquent debts that agencies have transferred to Treasury for cross-servicing and Treasury's efforts to encourage these referrals, (2) Treasury's cross-servicing process for collecting referred debts, (3) Treasury's method for allocating debts to private collection agencies, and (4) Treasury's estimated cross-servicing costs and related fees earned on collections.

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