Justice Department: Impediments Faced in Litigating and Collecting Debts Owed the Government

GAO discussed the effects of proposed legislation on the federal government's debt litigation and collection efforts. GAO noted that, as of September 30, 1987, federal agencies had: (1) delinquent nontax debts of about $32 billion; and (2) referred about 92,000 debt cases valued at about $8.5 billion to the Department of Justice (DOJ) for litigation and collection. GAO also noted that DOJ faced several impediments in debt litigation and collection, including: (1) incomplete or insufficient agency referral packages; (2) insufficient staffing; (3) large case backlogs, poor recordkeeping, and insufficient management oversight; and (4) federal bankruptcy and state laws which impeded or delayed debt recovery. In addition, GAO noted that the proposed Federal Debt Collection Procedures Act of 1988 could improve federal debt recovery by: (1) establishing uniform judicial enforcement remedies and property exemptions; (2) giving the federal government priority for unsecured claims in bankruptcy cases; and (3) establishing a debt collection fund to cover DOJ debt recovery expenses. GAO also noted that, to improve federal debt collection: (1) DOJ added extra staff to its debt collection units, developed training programs on collection techniques, and requested additional funds to add more staff and establish a debt collection fund; and (2) Congress enacted and passed legislation regarding debt collection procedures.