Debt Collection - Write Offs of Uncollectible Claims
This regulation revises established Department policy for write offs of uncollectible claims or debts in agency accounts to reflect increased agency authority to compromise debts, and suspend or end collection action. If the head of an agency of the Department adopts regulations separate from this regulation pursuant to independent statutory debt settlement authority, the procedures thereby established, rather than those set out in this regulation, shall be followed for the collection of the claims and debts to which the separate regulations apply.
Prior to the enactment of the Federal Claims Collection Act of 1966 (FCCA), Pub. L. No. 89-508, the authority to compromise and suspend or end collection action on debts owed to and claims in favor of the Government rested solely with the Attorney General of the United States. Under the FCCA, Federal agencies received the authority to compromise debts and claims, as well as to suspend or end collection action on debts and claims with principal amounts (i.e., exclusive of interest, penalties, and administrative costs) of no more than $20,000 and that did not involve fraud, misrepresentation, false claim, or mutual mistake of fact [31 U.S.C. 3711 (a) (2); 3711(d)]. Under section 8(b) of the Administrative Dispute Resolution Act, Pub. L. No. 101-552, enacted November 15, 1990, this amount was increased to $100,000.
Absent statutory authority setting forth a higher agency limit, the authority to compromise, suspend or terminate Federal agency debts and claims in excess of $100,000 remains with the Attorney General of the United States. The Attorney General also retains sole authority to compromise and suspend or end collection action regarding debts and claims involving fraud, misrepresentation, false claim, or mutual mistake of fact.