Overview

In an effort to improve Debt Management Services at NFC, the following procedures have been developed to identify Agency and NFC National Finance Center responsibilities. The objective of these procedures is to improve reporting and accelerate the processing and referral of the delinquent debt to conform with the Debt Collection Act of 1982, as amended by the Debt Collection Improvement Act (DCIA) of 1996 and the Office of Management and Budget's (OMB) Circular No. A-129, Policies For Federal Credit Programs and Non-tax Receivables. The DCIA and OMB Office of Management and Budget's Circular No. A-129 govern the requirements for managing non-tax receivables and collecting delinquent debts.

• The DCIA requires that a debt that is delinquent more than 120 days be referred to the United States Department of the Treasury (Treasury) for further collection action.
• The OMB Office of Management and Budget Circular No. A-129 mandates the following:
  • Delinquent receivables older than 2 years be written off unless documented and justified to OMB Office of Management and Budget in consultation with Treasury.
  • Delinquent receivables under 2 years may be collected using the following methods as authorized by OMB Circular No. A-129:
    • Demand letters
    • Administrative wage garnishment
    • Referring delinquent debts to the Treasury Offset Program (TOP)
    • Transferring delinquent debts to Treasury Cross-Servicing (Cross-Servicing)

These laws authorize automatic deduction from an indebted employee’s disposable pay as a collection procedure. Included in the repayment of the debt are interest, penalties, and administrative costs on overdue debts. It also authorizes the Government to contract for private collection services and to disclose information on debts to credit-reporting services and Treasury.

• These Acts permit collection of salary-related debts, program debts, and general employee indebtedness by offset against an employee’s current or final salary.
• These Acts prescribe standards to determine the amount to be deducted from an employee’s basic pay, special pay, incentive pay, retired pay, or other authorized pay.