U.S. Department of the Treasury

DATE: February 25, 2016

SUBJECT: Credit Management and Treasury Debt Collection Program

1. PURPOSE. This directive establishes policy and procedures for managing Department of the Treasury (Treasury) credit programs and for collecting loans and other receivables. It sets standards for extending credit, collecting current and delinquent receivables, writing off uncollectible accounts, and terminating collection action.
2. SCOPE. This directive applies to all Treasury bureaus, offices, and organizations, including the offices of inspectors general within Treasury. The provisions of this directive shall not be construed to interfere with or impede the authorities or independence of Treasury’s Inspectors General. The provisions of this directive also do not apply to the Bureau of the Fiscal Service’s process when acting on behalf of Treasury entities and other federal agencies to collect delinquent debts pursuant to 31 USC 3711(g)(1), 3716(c)(6), and 3720A, 31 CFR Part 285, and I TFM 4-4000.
3. POLICY. Treasury policy requires that Treasury entities:
   1. initiate aggressive and timely action to collect debts due Treasury or funds administered by Treasury. When appropriate, Treasury entities should consider the compromise of, or suspension or termination of, collection activity for any unpaid debt. Actions must comply with the “Federal Claims Collection Standards” (FCCS) at 31 CFR Parts 900 – 904, “Treasury Debt Collection” regulations at 31 CFR Part 5, and Debt Collection Authorities Under the Debt Collection Improvement Act of 1996 regulations at 31 CFR Part 285;
   2. establish a comprehensive credit management and debt collection program to ensure collection of receivables, to enable management to evaluate credit policies, to provide efficient and effective account servicing, and to improve the accuracy and timeliness of financial reports; and
   3. follow the procedures established in the Office of Management and Budget (OMB) Circular A-129 (Revised), “Policies for Federal Credit Programs and Non-Tax Receivables,” Treasury Financial Manual, Volume 1, Part 4, Chapter 4000, Debt Management Services Collection of Delinquent Nontax Debt, and “Managing Federal Receivables,” a Supplement to the Treasury Financial Manual.
4. TYPES OF DEBTS.
   1. This directive applies to all nontax debts owed to Treasury entities or to funds administered by Treasury entities, including but not limited to the following:
      1. 1) debts arising under direct, guaranteed and insured loan programs;
      2. 2) debts arising under financial contracts designed to support borrowing;
      3. 3) debts arising under grant programs and contracts;
      4. 4) employee debts; and
      5. 5) administrative debts, such as fines, fees, penalties, and overpayments;
   2. The debt collection provisions of this directive do not apply to debts arising under the Internal Revenue Code, the Social Security Act, and the tariff laws of the United States, except as otherwise authorized by statute. This directive does not apply to debts owed by another Federal agency.
   3. This directive does not apply to the process by which Treasury entities approve an employee’s request for waiver of an overpayment under 5 USC 5584 or 8346(b), 10 USC 2774, 32 USC 716, or other similar authorities. See Treasury Directive 34-01, “Waiving Claims Against Treasury Employees for Erroneous Payments.”
   4. Laws, regulations, and Treasury orders and directives specifically applicable to debt collection activities of a particular Treasury entity take precedence over the provisions of this directive.
5. RESPONSIBILITIES.
   1. The Chief Financial Officer (CFO) is the responsible Credit Management Official for Treasury. The CFO shall review, approve, and provide oversight of the credit management and debt collection systems, and ensure the adequacy of management controls for such systems and the programs the CFO supports.
   2. The Deputy Chief Financial Officer (DCFO) shall assist the CFO in fulfilling the official CFO responsibilities.
   3. The Director of Financial Reporting and Policy shall coordinate Treasury’s credit management and debt collection programs and provide technical advice to the DCFO.
   4. The Assistant Secretary for Management, Heads of Bureaus, Offices and other Treasury entities, the Inspector General, the Special Inspector General for the Troubled Asset Relief Program, and the Inspector General for Tax Administration, as it relates to their respective bureaus and offices, shall, as applicable:
      1. 1) designate an official to implement and manage the debt collection program within their respective organizations;
      2. 2) designate a contact to serve as liaison with the Director of Financial Reporting and Policy, to collect debts owed by Treasury employees to other federal agencies;
      3. 3) establish internal management reporting systems to provide timely information to Treasury’s DCFO on the credit management and debt collection programs, including the information required for the Treasury Report on Receivables Due from the Public, and to compare credit and debt collection operations to program objectives;
      4. 4) in cooperation with the Bureau of the Fiscal Service, develop procedures to refer eligible delinquent debts to the Bureau of the Fiscal Service as required by Federal law (see 31 USC 3711(g)(1), 3716(c)(6), and 3720A(a); 31 CFR Part 285);
      5. 5) develop procedures to assess interest, penalties, and administrative costs on delinquent debts in accordance with 31 USC 3717 and 31 CFR 901.9;
      6. 6) in accordance with OMB Circular A-129, develop procedures to write off debts and classify them as either (a) currently not collectible (CNC); or (b) closed-out and
      7. 7) develop any other necessary procedures to implement and manage the debt collection program within their organization.
   5. Treasury employees shall satisfy their just financial obligations in a timely manner. Employees shall manage their private financial affairs in a way that will not cause embarrassment to Treasury. See the “Standards of Ethical Conduct for Employees of the Executive Branch” at 5 CFR Part 2635, “Supplemental Standards of Ethical Conduct for Employees of the Department of the Treasury” at 5 CFR Part 3101, “Employee Responsibilities and Conduct” at 5 CFR Part 735, and “Department of the Treasury Employee Rules of Conduct” at 31 CFR Part 0.
6. IMPLEMENTATION. Guidance and procedures on implementing this directive are found in Treasury Directive Publication (TD P) 34-02.
7. CANCELLATION. Treasury Directive 34-02, “Credit Management and Debt Collection,” dated May 25, 1993, is superseded.
8. AUTHORITIES.
   1. The Federal Claims Collection Act of 1966, as amended (Public Law 89-508) (31 USC 3701 et seq.).
   2. The Debt Collection Act of 1982, as amended (Public Law 97-365) (5 USC 5514 and 31 USC 3701 et seq.).
   3. The Deficit Reduction Act of 1984, as amended (Public Law 98-369) (26 USC 6402 and 31 USC 3720A)
   4. The Chief Financial Officers Act of 1990, as amended (Public Law 101-576) (31 USC 901 et seq.).
   5. The Federal Debt Collection Procedures Act of 1990, as amended (Public Law 101-647) (28 USC 3001 et seq.).
   6. The Debt Collection Improvement Act of 1996, as amended (Public Law 104-134) ( 5 USC 5514 and 31 USC 3701 et seq.)
   7. 31 CFR Part 5, “Treasury Debt Collection.”
   8. 31 CFR Part 285, “Debt Collection Authorities Under the Debt Collection Improvement Act of 1996.”
   9. 31 CFR Parts 900-904, “Federal Claims Collection Standards.”
   10. OMB Circular A-129 (Revised), “Policies for Federal Credit Programs and Non-Tax Receivables.”
   11. Treasury Financial Manual, Volume 1, Part 4, Chapter 4000, Debt Management Services Collection of Delinquent Nontax Debt.
9. REFERENCES. For government-wide debt collection information, see web site of Treasury’s Bureau of the Fiscal Service at https://www.fiscal.treasury.gov/fsprograms/fs_debt.htm.
   1. “Managing Federal Receivables,” a Supplement to the Treasury Financial Manual.
   2. “Guide to the Federal Credit Bureau Program,” a Supplement to the Treasury Financial Manual.
   3. Treasury Order 101-05, “Reporting Relationships and Supervision of Officials, Offices and Bureaus, Delegation of Certain Authority in the Department of the Treasury.”
   4. Treasury Directive 16-14, “Debt Collection Improvement Act of 1996 and Other Government wide Receivables Management.”
10. OFFICES OF PRIMARY INTEREST. Office of Financial Reporting and Policy. Deputy Chief Financial Officer. Office of the Assistant Secretary for Management.