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The Financial Management Service is a bureau of the U.S. Department of the Treasury. Within the Financial Management Service is a section called the Debt Management Service (DMS), which is responsible for the co‑ordination and general management of debt collection on behalf of federal agencies.
Pursuant to the Debt Collection Improvement Act of 1996, any non-tax debt owed to the U.S. Government that is 180 days delinquent, with certain exceptions, will be referred to the Department of Treasury for collection. One of the key tools used to recover debt is the Treasury offset program, which facilitates the use of offset by maintaining a database of delinquent debtors that can be matched against payments disbursed by the Treasury. This program is merged with the tax refund offset program, which provides a single point of contact for agencies to refer debts for both tax refund offset and other administrative offset programs. Other debt recovery tools used by the Treasury include demand letters, telephone follow-up, skip tracing, and referral of debts to private collection agencies on the government‑wide contract. Under the Debt Collection Improvement Act of 1996, the Treasury is required to maintain a schedule of private collection agencies or private sector companies having expertise in the area of debt collection. The DMS monitors the activities of the private collection agencies on a daily basis.
The Public Finance Management Act (PFMA) and related regulations provide the framework for financial management in South Africa, including debt collection. The PFMA delegates responsibility for financial management to departments with a focus on the chain of accountability, monitoring, and reporting requirements.
Each department appoints an accounting officer with a performance contract that specifies his or her responsibility for budgetary control and reporting. Internal audit committees in each department are established and made up of auditors, management, someone from outside the Public Service, and a chairperson not employed in the department. The internal audit committee reports findings to the accounting officer, and the accounting officer may implement measures in response to the report (such as training, guidelines, etc.).
The accounting officer must take effective and appropriate steps to collect all money due to the department. This will require the accounting officer to consider the following: procedures for writing off debts; monthly reconciliations of the debtors ledger with each debtor's account(s); preparation of monthly age analysis reports and follow-up action on debtors; terms of trade for debtors and the issuing of reminder notices; and charging interest on all debts. Collection measures should be progressive and include the following routine actions: issuing invoices when a service is rendered; sending monthly statements; sending reminders; and making personal contact. Departments may use private sector agencies to trace debtors when their normal tracing activities fail. Any related costs should be borne by the debtor and not the department.
The PFMA makes clear that disciplinary proceedings and criminal proceedings may be held against an accounting officer or an official in cases of financial misconduct. "Financial misconduct" is defined differently for accounting officers, Treasury officials, and officials of other departments. For example, an accounting officer commits an act of financial misconduct if he or she fails to comply with certain sections of the PFMA or makes an unauthorized expenditure, irregular expenditure, or a fruitless or wasteful expenditure. Losses and damages may be recoverable from an accounting officer or official in certain circumstances outlined in the Treasury Regulations (Chapter 4 and 12).
The Financial Management and Accountability Act 1997 (FMAA) sets out the framework for the proper use and management of public money. It provides agency heads with greater flexibility and autonomy in their financial management, rather than a more prescriptive and centralized approach.
The FMAA imposes criminal liability and other liability on officials or ministers in certain cases of financial mismanagement. For example, there may be criminal liability in cases where an official or minister misapplies public money or improperly disposes of or uses public money. Further, an official or minister may be liable for the loss of public money if the official or minister contributed to the loss by misconduct or by a deliberate or serious disregard of reasonable standards of care. Finally, the FMAA specifically states that a person's liability (which arose while the person was an official or minister) cannot be avoided simply because the person ceases to be an official or minister.
With respect to debt recovery, the FMAA states that each Chief Executive must pursue the recovery of debt unless the debt has been written off, the Chief Executive is satisfied that the debt is not legally recoverable, or the Chief Executive considers that it is not economical to pursue recovery of the debt.
Most recently, pursuant to the Government Resources and Accounts Act, 2000, a permanent head of a department is separately appointed by the Treasury as an accounting officer.
The United Kingdom has specific guidelines set out in the Government Accounting Manual, which deals with the recovery of overpayments and losses. In the case of overpayments, recovery is often pursued through a salary deduction or through the common law right of set-off. The Manual provides a detailed analysis of the common law right of set-off, including a description of the right, the effect of the Limitation Acts, and possible defences against recovery such as estoppel, change of position, and good consideration. The Manual also provides guidelines in cases where the overpayment involved bad faith on the part of the payee and prosecution or disciplinary action may be appropriate.
The Parliamentary Ombudsman is empowered, under the Parliamentary Commissioner Act, 1967, to investigate complaints referred by members of Parliament from members of the public who consider they have suffered injustice as a result of maladministration. The Parliamentary Ombudsman may recommend that the department or agency should provide redress for the complainant (and for any others who may have suffered in the same way). Redress may be an explanation, an apology, an undertaking to improve procedures or systems, an ex gratia payment, or a combination of such measures. The Ombudsman's recommendations on remedies are not legally binding and can be rejected.