Oregon A/R and Collection Practices 1997 Secretary of State Audit, Opportunities to Improve #97- 77 2004 Secretary of State Audit, Debt Collections #2004-24 2005 Secretary of State Audit, OUS Written-off Debt #2005-10 Chuck Hibner, Administrator, DHS’s Office of Payment Accuracy and Recovery ((former Director Oregon Audits Division (2006 – 2009))
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Oregon A/R and Collection Practices 1997 Secretary of State Audit, Opportunities to Improve #97-77 2004 Secretary of State Audit, Debt Collections #2004-24.
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Oregon A/R and Collection Practices
1997 Secretary of State Audit, Opportunities to Improve #97-77
2004 Secretary of State Audit, Debt Collections #2004-24
2005 Secretary of State Audit, OUS Written-off Debt #2005-10
Chuck Hibner, Administrator, DHS’s Office of Payment Accuracy and Recovery
((former Director Oregon Audits Division (2006 – 2009))
1997 Audit – Opportunities to Improve Delinquent Debt Collection
• Audit Purpose – to identify and recommend ways in which the state could improve its processes for collecting delinquent debts.
Agencies Involved
Transportation – Weight-mile taxesHuman Service – Benefit overpayments Employment – Benefit overpayments and insurance taxesConsumer and Business Services – Workers’ comp taxes,
penalties and worker claim costsRevenue – Other Agency Account unit & Income Taxes
Scope
Represented $940 million in debt for CY 1995 Collected $100 million of the $940 during the calendar
• In 1995 collection process decentralized.• State, federal laws and regulation grant unique collection
powers and impose restrictions on specific agencies.• Private firms’ small percentage of total occurs partly
because some state agencies believe their own efforts are more cost effective.
• Decentralized collection results limited information sharing regarding best practices and individual debtors.
Recommendations
• State agencies form a statewide collection committee to foster interagency coordination on collection issues and sharing of best practices.
Recommendations
• Establish a vendor offset program
Recommendations
• Request authority to perform administrative garnishments
Recommendations
• Use a statewide master contract to hire private collection firms
Recommendations
• Review autodialing system and determine whether use would be beneficial
Other Recommendations
• Pilot project to test how PCFs can be better utilized• Get approval to access “new hire” data• Expand use of technology
2004 Audit – Progress Made But Still Opportunities
Purpose – Follow up on the 1997 audit and; Determine if state agencies could improve their collection
of delinquent debt.
Agencies Involved
Transportation – Weight-mile taxesJudicial – Criminal fines and other feesHuman Service – Benefit overpayments Employment – Benefit overpayments and insurance
taxesEnvironmental Quality – Civil penaltiesConsumer and Business Services – Workers’ comp
taxesRevenue – Other Agency Account unit
Scope
Represented $237 million of the $1.2 billion in delinquent debt in fy 2002 (20%).
Collected $45 million of the $237 during the fiscal year (19%).
Three Primary Approaches
Agencies have their own internal debt collection units (Employment, Human Services, Transportation, and Consumer and Business Services)
Primarily use Revenue’s Other Agency Accounts UnitPrimarily contract for service of private collection
agencies.
Findings
Prior audit finding implemented with the exception of the vendor offset
Findings
Insufficient Staffing and Large Caseloads Prevent Timely Follow-upActivity = Collection