Debt collection must improve

The Olympian • Published August 22, 2008

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With a little more diligence and persistence, the state can collect millions of dollars in debt owed by individuals, businesses, agencies or other governmental entities.

That's the conclusion of a $701,882 performance audit recently released by state Auditor Brian Sonntag.

It's incumbent upon state agencies to follow the audit recommendations and adopt a series of best practices for debt collection.

Even before the performance audit was released in its final form, some state agencies were changing their practices and getting results for taxpayers.

Sonntag, for example, saluted the Department of Labor and Industries for putting performance audit recommendations into practice and improving the agency's collections by 50 percent over the previous year.

Sonntag is right when he says, "Citizens have an expectation that the state will collect revenue in an efficient and timely manner."

But is the state living up to that expectation?

To answer the question, state auditors reviewed the overdue receivables owed agencies of state government. Auditors found that from July 1, 2004, through June 30, 2006, the amount owed the state rose from $4.5 billion to $5 billion, a 10 percent increase. Auditors selected six agencies that represent 70 percent -- $3.3 billion -- of the state's total receivables, for review.

"We identified eight best practices that greatly improve collection success," Sonntag said. "We made recommendations to five agencies that mirror best practices and, in most cases, can be instituted with no additional resources."

The auditors examined 10 programs and found eight programs that need to improve their collection practices. Sonntag said, "If the eight programs reduce their delinquent account balances by a modest 5 percent, the state will collect approximately $15.6 million more per year. If they reduce delinquent account balances by 50 percent, they can collect an additional $159.7 million."

Following best practices is key, according to the audit. Those best practices include: