CFR Subpart B

CFR Subpart B
in effect

22 C.F.R. § 213.7 Collection—general.

(a) The CFO takes action to collect all debts owed the United States that arise out of USAID's activities, and to reduce debt delinquencies. Collection actions may include sending at least one written demand for payment notice to the debtor's last-known address provided in the records of USAID. Other appropriate action may proceed the written demand for payment notice, including immediate referral to DOJ for litigation, when such action is necessary to protect the Federal Government's interest. (b) The CFO maintains an administrative file for each debt and/or debtor which documents the basis for the debt, all administrative collection actions regarding the debt (including communications to and from the debtor) and its final disposition. Information on an individual may be disclosed only for purposes that are consistent with this part, the Privacy Act of 1974 and other applicable law.

22 C.F.R. § 213.8 Written demand for payment notice.

(a) When an Agency official determines that a debt is owed to USAID, the Agency sends a written demand for payment notice to the debtor. Unless otherwise provided by agreement, contract, or order, the written demand for payment notice informs the debtor of: (1) The amount, nature and basis of the debt; (2) The right of the debtor to inspect and copy records related to the debt; (3) The right of the debtor to discuss and propose a repayment agreement; (4) Any rights available to the debtor to review the debt, or to have recovery of the debt waived (by citing the available review or waiver authority, the conditions for review or waiver, and the effects of the review or waiver request on the collection of the debt); (5) The date on which debt payment is due, which will be not more than 30 days from the date the written demand for-payment notice is mailed or hand delivered; (6) The instructions for making electronic payment; (7) The debt is considered delinquent if it is not paid on the due date provided in the initial written demand-of payment notice; (8) The imposition of interest charges, penalties, and administrative costs that USAID may assess against a delinquent debt, and the date when such charges apply; (9) The intention of USAID to use non-centralized administrative offset to collect the debt if appropriate and, if not, the referral of the debt 90 days after the Bill for Collection or demand letter to the Financial Management Service in the Department of Treasury who will collect their administrative costs from the debtor in addition to the amount owed USAID and use all means available to the Federal Government for debt collection including administrative wage garnishment, use of collection agencies and reporting the indebtedness to a credit reporting bureau (see § 213.14); (10) The Agency will refer delinquent debt unpaid at 90 days from the initial written demand for payment notice to the Bureau of the Fiscal Service (Fiscal Service) within the U.S. Department of the Treasury. Statute requires the referral of delinquent debt to Fiscal Service no later than 120 days from the initial written demand-for-payment notice. Fiscal Service will use means available to the Federal Government for collecting a debt, including administrative wage-garnishment, the use of collection agencies, and reporting the indebtedness to a credit-reporting bureau (see § 213.15); (11) The address, telephone number, and name of the person available to discuss the debt; and (12) The possibility of referral to DOJ for litigation if USAID cannot collect the debt administratively. (b) USAID will respond promptly to written communications from the debtor, generally within 30 days of receipt of such a communication.

22 C.F.R. § 213.9 Agency review requirements.

(a) For purposes of this section, whenever USAID must afford a debtor a review within the Agency, USAID shall provide the debtor with a reasonable opportunity for a review when the debtor requests reconsideration of the debt in question. The review may include the examination of documents, internal discussions with relevant officials, and discussion by letter or orally with the debtor, at USAID's discretion. For the offset of current Federal salary under 5 U.S.C. 5514 for certain debts, an employee may request an outside hearing. See §§ 213.21 and 213.22 when USAID is the creditor Agency. (b) Unless otherwise required by law, an oral hearing under this section is not required to be a formal evidentiary hearing, although USAID will carefully document all significant matters discussed at the hearing. (c) This section does not require an oral hearing with respect to debt collection in which the agency has determined that review of the written record is an adequate means to correct a prior mistake. (d) In those cases when an oral hearing is not required by this section, USAID shall accord the debtor a “paper hearing,” that is, a determination of the request for reconsideration based upon a review of the written record. (e) If, after review, USAID either sustains or amends its determination, it shall notify the debtor of its intent to collect the sustained or amended debt. The notification to collect the sustained or amended debt will include accrued interest on the sustained or amended debt, calculated from the date of delinquency. If USAID has suspended collection actions previously, it will reinstitute them unless it receives payment of the sustained or amended amount, or the debtor has made a proposal for a payment plan to which the Agency agrees, by the date specified in the notification of USAID's decision.

22 C.F.R. § 213.10 Aggressive collection actions; documentation.

(a) USAID takes actions and effective follow-up on a timely basis to collect all claims of the United States for money and property arising out of USAID's activities. USAID cooperates with other Federal agencies in their debt collection activities. (b) USAID documents all administrative collection actions in the claim file, along with the basis for any compromise, termination, or suspension of collection actions. USAID retains this documentation, which may include the Claims-Collection Litigation Report (CCLR) provided in § 213.24, in the appropriate debt file.

22 C.F.R. § 213.11 Interest, penalties, and administrative costs.

(a) Interest. USAID will assess interest on all delinquent debts unless prohibited by statute, regulation or contract. (1) Interest begins to accrue on all delinquent debts starting from the day after the payment due date established in the initial written demand-for payment notice to the debtor. USAID will assess an annual rate of interest that is equal to the U.S. Department of the Treasury Current Value of Funds Rate (CVFR) unless a different rate is necessary to protect the interest of the Federal Government. USAID will notify the debtor of the basis for its finding that a different rate is necessary to protect the interest of the Government. (2) The rate of interest, as initially assessed, remains fixed for the duration of the indebtedness. If a debtor defaults on a repayment agreement, interest may be set at the Treasury rate in effect on the date a new agreement is executed. (3) Interest will not be assessed on interest charges, administrative costs or late payment penalties. However, where a debtor defaults on a previous repayment agreement and interest, administrative costs and penalties charges have been waived under the defaulted agreement, these charges can be reinstated and added to the debt principal under any new agreement and interest charged on the entire amount of the debt. (b) Administrative costs of collecting overdue debts. The costs of the Agency's administrative handling of overdue debts including charges assessed by Treasury in cross-servicing USAID debts, based on either actual or average cost incurred, will be charged on all debts except those owed by State and local governments and Indian tribes. These costs include both direct and indirect costs. (c) Penalties. As provided by 31 U.S.C. 3717(e)(2), a penalty charge will be assessed on all debts, except those owned by State and local governments and Indian tribes, more than 90 days delinquent. The penalty charge will be at a rate not to exceed 6% per annum and will be assessed monthly. (d) Allocation of payments. A partial payment by a debtor will be applied first to outstanding administrative costs, second to penalty assessments, third to accrued interest and then to the outstanding debt principal. (e) Waivers for the collection of interest, penalties, and administrative costs. (1) The CFO will waive the collection of interest and administrative charges on the portion of the debt paid within 30 days after the date on which interest begins to accrue. The CFO may extend this 30-day period, on a case-by case basis, when he or she determines that such action is in the best interest of the Federal Government. A decision to extend or not to extend the payment period is final, and is not subject to further review. (2) The CFO may (without regard to the amount of the debt) waive the collection of all or part of accrued interest, penalties, or administrative costs, when he or she determines that— (i) A waiver is justified under the standards for the compromise of claims under § 213.25; or (ii) Collection of these charges would be against equity and good conscience, or is not in the best interest of the United States. (3) The CFO may make a decision to waive interest, penalties, or administrative costs at any time.

22 C.F.R. § 213.12 Interest, penalties, and administrative costs pending consideration of debt waiver or review.

Interest, penalties, and administrative costs will continue to accrue on a debt during a review by USAID and during a waiver of indebtedness consideration by the Agency; except that USAID will not assess interest, penalties, and administrative costs where a statute or a regulation specifically prohibits the collection of the debt during the period of the Agency's review or consideration of a debt waiver.

22 C.F.R. § 213.13 Waivers of indebtedness.

The CFO may grant waivers of indebtedness for certain types of debt identified in Federal statutes under the following waiver authorities: (a) Waiver authorities—(1) Debts that arise out of erroneous payments of pay and allowances, and of travel, transportation, and relocation expenses and allowances. Title 5 U.S.C. 5584 provides the authority for waiving, in whole or in part, debts that arise out of erroneous payments of pay or allowances, travel, transportation, or relocation expenses and allowances to an employee of USAID, if collection would be against equity and good conscience, or not in the best interests of the United States: (i) The CFO may not grant a waiver if there exists in connection with the claim an indication of fraud, misrepresentation, fault, or lack of good faith on the part of the employee or any other person who has an interest in obtaining a waiver. (ii) Fault is considered to exist if, in light of the circumstances, the employee knew, or should have known through the exercise of due diligence, that an error existed, but he or she failed to take corrective action. What an employee should have known is evaluated under a reasonable-person standard. However, employees are expected to have a general understanding of the Federal pay system applicable to them. (iii) An employee with notice that a payment might be erroneous is expected to make provisions for eventual repayment. Financial hardship is not a basis for granting a waiver for an employee who was on notice of an erroneous payment. (iv) If the deciding official finds no indication of fraud, misrepresentation, fault, or lack of good faith on the part of the employee or any other person who has an interest in obtaining a waiver of the claim, the employee is not automatically entitled to a waiver. Before granting a waiver, the deciding official also must determine that collection of the claim against an employee would be against equity and good conscience, or not in the best interests of the United States. Factors to consider when determining if collection of a claim against an employee would be against equity and good conscience, or not in the best interests of the United States, include, but are not limited to, the following: (A) Whether collection of the claim would cause serious financial hardship to the employee from whom the Agency seeks collection; (B) Whether, because of the erroneous payment, the employee either has relinquished a valuable right or changed positions for the worse, regardless of his or her financial circumstances; (C) The time elapsed between the erroneous payment and the discovery of the error and notification of the employee; (D) Whether failure to make restitution would result in unfair gain to the employee; and (E) Whether recovery of the claim would be unconscionable under the circumstances. (2) Debts that arise out of advances in pay (5 U.S.C. 5524a); situations of Authorized or Ordered Departures (5 U.S.C. 5522); or allowances and differentials for employees stationed abroad (5 U.S.C. 5922). Title 5 U.S.C. 5524a, 5522, or 5922 provide authority for waiving, in whole or in part, a debt that arises out of such an advance payment if it is shown that recovery would be against equity and good conscience, or against the public interest: (i) Factors to consider when determining if recovery of an advance payment would be against equity and good conscience, or against the public interest, include, but are not limited to, the following: (A) Death of the employee; (B) Retirement of the employee for disability; (C) Inability of the employee to return to duty because of disability (supported by an acceptable medical certificate); and (D) Whether failure to repay would result in unfair gain to the employee. (ii) [Reserved] (3) Debts that arise out of employee training expenses. Title 5 U.S.C. 4108 provides the authority for waiving, in whole or in part, a debt that arises out of employee training expenses if it is shown that recovery would be against equity and good conscience, or against the public interest: (i) Factors to consider when determining if recovery of a debt that arises out of employee training expenses would be against equity and good conscience, or against the public interest, include, but are not limited to, the following: (A) Death of the employee; (B) Retirement of the employee for disability; (C) Inability of the employee to return to duty because of disability (supported by an acceptable medical certificate); and (D) Whether failure to repay would result in unfair gain to the employee. (ii) [Reserved] (4) Under-withholding of life insurance premiums. Title 5 U.S.C. 8707(d) provides the authority for waiving the collection of unpaid deductions that result from the underwithholding of premiums under the Federal Employees' Group Life Insurance Program if the individual is without fault and recovery would be against equity and good conscience, or against the public interest: (i) Fault is considered to exist if, in light of the circumstances, the employee knew, or should have known through the exercise of due diligence, that an error existed, but he or she failed to take corrective action: (ii) Factors to consider when determining whether the recovery of unpaid deduction that results from under-withholding would be against equity and good conscience, or against the public interest, include, but are not limited to, the following: (A) Whether collection of the claim would cause serious financial hardship to the individual from whom the Agency seeks collection; (B) The time elapsed between the failure to withhold properly and the discovery of the failure and notification of the individual; (C) Whether failure to make restitution would result in unfair gain to the individual; and (D) Whether recovery of the claim would be unconscionable under the circumstances. (5) Student-Loan Repayment Program service agreements. Title 5 U.S.C. 5379 provides for waiving, in whole or in part, debt that arises from the Student Loan Repayment Program if it is shown that recovery would be against equity and good conscience, or against the public interest: (i) Factors to consider when determining if recovery of a debt that arises out of the Student-Loan Repayment Program would be against equity and good conscience, or against the public interest, include, but are not limited to, the following: (A) Death of the employee; (B) Retirement of the employee for disability; (C) Inability of the employee to return to duty because of disability (supported by an acceptable medical certificate); and (D) Whether failure to repay would result in unfair gain to the employee. (ii) [Reserved] (b) [Reserved]

22 C.F.R. § 213.14 Contracting for collection services.

USAID has entered into a cross-servicing agreement with the Bureau of the Fiscal Service (Fiscal Service) of the U.S. Department of the Treasury. Fiscal Service is authorized to take all appropriate action to enforce the collection of accounts referred to it in accordance with applicable statutory and regulatory requirements. Fiscal Service bases any applicable fees on the funds collected, and will collect such fees from the debtor along with the original amount of the indebtedness. After referral, Fiscal Service will be solely responsible for the maintenance of the delinquent debtor records in its possession, and for updating the accounts as necessary. Fiscal Service may take any of the following collection actions on USAID's behalf: (a) Send demand letters on U. S. Treasury letterhead and telephone debtors; (b) Refer accounts to credit bureaus; (c) Skiptracing; (d) Purchase credit reports to assist in the collection effort; (e) Refer accounts for offset, including tax refund, Federal employee salary, administrative wage garnishment, and general administrative offset under the Treasury Offset Program. (f) Refer accounts to private collection agencies; (g) Refer accounts to DOJ for litigation; (h) Report written off/discharged debts to IRS on the appropriate Form 1099; (i) Take any additional steps necessary to enforce recovery; and (j) Terminate collection action, as appropriate.

22 C.F.R. § 213.15 Use of credit-reporting bureaus.

USAID reports delinquent debts owed to it to appropriate credit-reporting bureaus through the cross-servicing agreement with the Bureau of the Fiscal Service (Fiscal Service) at the U.S. Department of the Treasury. (a) The following information is provided to the credit reporting bureaus: (1) A statement that the claim is valid and is overdue; (2) The name, address, taxpayer identification number and any other information necessary to establish the identity of the debtor; (3) The amount, status and history of the debt; and (4) The program or pertinent activity under which the debt arose. (b) Before referring claims to Fiscal Service and disclosing debt information to credit-reporting bureaus, USAID will have done the following: (1) Taken reasonable action to locate the debtor if a current address is not available; and (2) If a current address is available, notified the debtor in writing that: (i) The designated USAID official has reviewed the claim and has determined that it is valid and overdue; (ii) If the debtor does not pay the debt 90 days after receiving the initial written demand-for-payment notice, USAID intends to refer the debt to Fiscal Service and disclose to a credit-reporting agency the information authorized for disclosure by this subpart; and (iii) The debtor can request an Agency review or waiver, where applicable. (c) Before submitting information to a credit-reporting bureau, USAID will provide a written statement to Fiscal Service that the Agency has taken all required actions. Additionally, Fiscal Service thereafter will update the accounts as necessary during the period it holds the account information.

22 C.F.R. § 213.16 Use and disclosure of mailing addresses.

(a) When attempting to locate a debtor in order to collect or compromise a debt, the CFO may obtain a debtor's current mailing address from the Internal Revenue Service. (b) Addresses obtained from the Internal Revenue Service will be used by the Agency, its officers, employees, agents or contractors and other Federal agencies only to collect or dispose of debts, and may be disclosed to other agencies and to collection agencies only for collection purposes.

22 C.F.R. § 213.17 Liquidation of collateral.

Where the CFO holds a security instrument with a power of sale or has physical possession of collateral, he or she may liquidate the security or collateral and apply the proceeds to the overdue debt. USAID will exercise this right where the debtor fails to pay within a reasonable time after demand, unless the cost of disposing of the collateral is disproportionate to its value or special circumstances require judicial foreclosure. However, collection from other businesses, including liquidation of security or collateral, is not a prerequisite to requiring payment by a surety or insurance company unless expressly required by contract or statute. The CFO will give the debtor reasonable notice of the sale and an accounting of any surplus proceeds and will comply with any other requirements of law or contract.

22 C.F.R. § 213.18 Suspension or revocation of eligibility for loans and loan guarantees, licenses or privileges.

Unless waived by the CFO, USAID will not extend financial assistance in the form of a loan or loan guarantee to any person delinquent on a nontax debt owed to a Federal agency. USAID may also suspend or revoke licenses or other privileges for any inexcusable, prolonged or repeated failure of a debtor to pay a claim. Additionally, the CFO may suspend or disqualify any contractor, lender, broker, borrower, grantee or other debtor from doing business with USAID or engaging in programs USAID sponsors or funds if a debtor fails to pay its debts to the Government within a reasonable time. Debtors will be notified before such action is taken and applicable suspension or debarment procedures will be used. The CFO will report the failure of any surety to honor its obligations to the Treasury Department for action under 31 CFR 332.18.

22 C.F.R. § 213.19 Installment payments.

(a) Whenever feasible, and except as otherwise provided by law, debts owed to the United States, together with interest, penalties and administrative costs, as required by § 213.11, will be collected in a single payment. However, where the CFO determines that a debtor is financially unable to pay the indebtedness in a single payment or that an alternative payment mechanism is in the best interest of the United States, the CFO may approve repayment of the debt in installments. The debtor has the burden of establishing that it is financially unable to pay the debt in a single payment or that an alternative payment mechanism is warranted. If the CFO agrees to accept payment by installments, the CFO may require a debtor to execute a written agreement which specifies all the terms of the repayment arrangement and which contains a provision accelerating the debt in the event of default. The size and frequency of installment payments will bear a reasonable relation to the size of the debt and the debtor's ability to pay. The installment payments will be sufficient in size and frequency to liquidate the debt in not more than 3 years, unless the CFO determines that a longer period is required. Installment payments of less than $50 per month generally will not be accepted, but may be accepted where the debtor's financial or other circumstances justify. (b) If a debtor owes more than one debt and designates how a voluntary installment payment is to be applied among the debts, that designation will be approved if the CFO determines that the designation is in the best interest of the United States. If the debtor does not designate how the payment is to be applied, the CFO will apply the payment to the various debts in accordance with the best interest of the United States, paying special attention to applicable statutes of limitations.

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