USDANEWS VOLUME 58 NO. 9 — DECEMBER 1999
by Ron Hall, Office of Communications
The late champion prizefighter Joe Louis once observed about an upcoming boxing opponent that “He can run, but he can’t hide.”
That observation might also apply to those entities or individuals who owe money to USDA and who are delinquent in their payments.
In fact, USDA collected $136.2 million in delinquent debt during FY 1999, according to Dick Guyer, executive assistant to Deputy Chief Financial Officer Patricia Healy. He noted that this figure represented a 45 percent increase over the $93.9 million in delinquent debt USDA collected in FY 1998, and a 90 percent increase over the $71.5 million in delinquent debt USDA collected in FY 1997.
He said that delinquent federal debts owed to USDA may be from such activities as loans for rural utilities, over-issuances of food stamps, foreign debt, fines levied against arsonists in U.S. national forests, and debts from Departmental employees.
He added that the 'entities’ that owe money to USDA can be individuals, partnerships, corporations, and retailers.
“USDA is the largest lender in the federal government,” he underscored.
“The Debt Collection Improvement Act of 1996,” Guyer pointed out, “provided additional tools to federal departments to employ, in order to both speed up and maximize collection of delinquent debts owed to it.”
One such tool is called 'offset.’ “It’s the buzzword,” he said, “describing the procedure in which an employee’s salary is reduced by a certain amount each pay period, until the delinquent federal debt has been paid in full.”
If the delinquent debtor is not an employee but rather is an entity such as a partnership, corporation, or retailer, then the 'offset’ procedure can be applied against would-be sources of federal payment to that entity.
The Debt Collection Improvement Act was since expanded to cover delinquent child support payments owed by federal employees, including those at USDA.
The September 1998 issue of the USDA News carried a story on the additional tools used by USDA to collect delinquent debts. The January-February 1998 USDA News carried a story on the various methods USDA uses to collect money that its customers owe-- whether delinquent or not.
Office of the Chief Financial Officer asset management team leader Dale Theurer said that another positive trend in the last few years is in the amount of delinquent debts that USDA has to write off as uncollectible. “An uncollectible debt may be one that is in default, in foreclosure, in bankruptcy, in litigation, or is a payment due from some particular foreign countries,” he said.
During FY99 the Department had to write off $486.4 million in delinquent debts as uncollectible. By contrast, the figure for FY98 was $518.5 million, and for FY97 was over $1.1 billion.
“The average delinquent rate across the federal government is 22 percent--but the average delinquent rate across USDA is six percent,” Guyer said. “This means that, of all the monetary payments due annually to USDA, six percent is delinquent.”
“We consider these tools the best way for taxpayers to ensure that delinquent debts are collected in a fair and efficient manner,” he affirmed. “That’s our game plan here at USDA, and those figures support that.”
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