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Treasury Celebrates 15th Anniversary of the Debt Collection Improvement Act

May 16, 2011 — Treasury's Financial Management Service (FMS) announced that it recently achieved two major milestones in its efforts to collect delinquent debts on behalf of federal and state agencies. On April 26, FMS commemorated the 15-year anniversary of the Debt Collection Improvement Act (DCIA) of 1996, and reached the $50 billion mark in the amount of debts collected since enactment of the law. FMS expects to increase these collections by 50 percent over the next five years to $7-8 billion dollars per year.

Since enactment of the DCIA, FMS has collected more than $51.6 billion of delinquent debt on behalf of federal and state agencies:

• $21.5 billion of delinquent federal nontax debt owed to federal agencies;
• $2.6 billion of delinquent federal tax debt owed to the Internal Revenue Service;
• $24.9 billion of delinquent child support owed to states and custodial parents; and
• $2.5 billion of other types of delinquent debts owed to states;
• $52.42 is collected for every one dollar spent on FMS debt collection activities.

FMS collects these debts by intercepting federal payments to debtors who owe delinquent debts. "Our premise is simple. We should not pay those who have failed to meet their obligations to the United States—or States—without first applying that money to the delinquent debt," said FMS Commissioner David A. Lebryk.

FMS also provides full-service debt collection of delinquent federal nontax debts. FMS contacts debtors by letter and by phone; refers debts to private collection agencies; issues administrative wage garnishment orders to attach the wages of working debtors; and reports debts to credit bureaus.

"While proud of our achievements over the past 15 years, we appreciate that much more can be done," said David A. Lebryk, Commissioner of FMS. "The amount of delinquent debt owed to the federal government has climbed 67 percent to nearly $104 billion in the last five years. It is vital for FMS to continue to expand and enhance these collections which are critical to the American taxpayer, as the money we collect is used to help fund government operations and maintain key programs."

As FMS continues to improve upon and expand our program, a period of sustained growth is expected, ultimately reaching the 2015 goal of increasing collections to $7-8 billion annually. This will be accomplished through a multi-faceted strategy that includes:

• Strengthening Treasury’s debt collection authorities
• Increasing call capacity and debt services
• Implementing state-of-the-art debt collection tools
• Optimizing debt collection processes
• Collaborating with customers and stakeholders
• Increasing analytical capabilities
• Optimizing debt operations

"At FMS, we are committed to increasing collections in as cost-effective manner as possible, and making sure that all debtors are treated fairly," said Lebryk. "We are ready to meet the federal government's need for a dynamic debt collection program that uses the latest technology to ensure an efficient and vigorous operation that enjoys sustained growth."

The Financial Management Service is a bureau of the U.S. Department of the Treasury. Our mission is to provide central payment services to federal program agencies, to operate the federal government's collections and deposit systems, to provide government-wide accounting and reporting services and to manage the collection of delinquent debt owed to the government.