Summary: Most Federal debts are paid routinely. However, because collection efforts are not always successful, the amounts owed and written off are substantial and growing rapidly. Legislation has been proposed which would remove an obstacle to the Government's use of the commercial practice of reporting an individual's delinquent financial obligations to credit bureaus. The bill also provides for making agencies more accountable for their collection activities. GAO supports both of these objectives. It believes that reporting delinquent debts is an effective tool for strengthening Government collection programs, especially in the effort to collect debts for which, due to their size, it is not practical to take legal action. GAO also believes that legislation is needed to: provide authority to collect general debts owed the Government by offset from a Federal employee's salary, recognize that the 6-year statute of limitations does not prohibit the offset of debts owed to the Government, and remove the restriction on redisclosure of a debtor's address that has been obtained from the Internal Revenue Service. To provide an incentive to Government debtors to keep their payments current, GAO believes that, unless there is a specific prohibition in the law, agencies should include in their loan agreements a provision allowing for the rate of interest to be increased to the prescribed Treasury rate if delinquency occurs. Higher priorities should be placed on debt collection in relation to conflicting concerns for personal privacy.
