U.S. Geological Survey Instructional Memorandum
No. APS 2003-11
Issuance Date: May 1, 2003
Expiration Date: April 30, 2004
Archive: October 23, 2008
Subject: Monthly Review of Billed Accounts Receivable
Reference. IM replaced by Financial Operating Procedures Handbook Chapter 17.5, Accounts Receivable Billing and Chapter 18, Required Review and Certification.
1. Purpose. This Instructional Memorandum (IM) prescribes the procedures for a monthly review of billed accounts receivable and the reporting of the status of those receivables. This IM also consolidates and replaces previously issued procedures pertaining to delinquent debt review.
A. Account Receivable (Aging) reports. Monthly Federal Financial System (FFS) reports CRARA2 and CRARA4 that age and sort receivables by cost center. The reports are available electronically via Control-D.
B. Billing Offices. U.S. Geological Survey (USGS) offices responsible for issuing bills to Federal and non-Federal customers. Billing offices include all USGS cost centers and bureau centers, categorized as:
(1) Science/field centers – Field program offices responsible for managing reimbursable agreements and billing for costs incurred in accordance with the terms of the agreements.
(2) Regional/national centers – Regional and national program offices, the Office of Fiscal Services and the Branch of Fiscal Services (Fiscal Services offices).
(3) Sales centers – Offices responsible for issuing billings and processing collections for the sale of maps and products.
(4) Administrative support offices - All other offices responsible for billings outside of the reimbursable program, including:
(a) Office of Financial Management (OFM) – is responsible for billing for employee debts, travel debts, refunds due as a result of overpayments, etc.
(b) Human Resources Office (HRO) – is responsible for billing employees related to training agreements.
(c) Office of Acquisition and Grants – is responsible for the billing of disallowed contract costs as a result of an audit.
C. Debt Collection Improvement Act of 1996 (DCIA). Legislation enacted that establishes requirements for processing delinquent debts owed by non-Federal customers and provides agencies with collection tools to assist in collecting delinquent debts.
D. Delinquent debt. Bills that have not been paid by a customer by the collection due date included on the bill, usually 30 days from the bill date. Bills issued under the Joint Funding Agreement (JFA) program or to foreign customers usually have a due date of 60 days from the bill date.
E. Disputed debt. A bill that a customer claims is not in accordance with the agreement, such as a bill issued prior to the USGS completing the work when the agreement does not provide for advance billing.
F. Eligible debt (for referral to Department of the Treasury). All debts owed to the USGS by non-Federal customers that become 180 days delinquent or debts that are determined to be uncollectible prior to becoming 180 days delinquent, except those debts that are: 1) less than $25, 2) under a current repayment plan, 3) owed by a foreign government, 4) disputed by the customer and under review/negotiation with the customer, or 5) owed by a customer that has filed bankruptcy. However, debts which exceed $2,500 and are 1) owed by a foreign government, 2) disputed by the customer and cannot be resolved with the customer, or 3) owed by a customer that has filed bankruptcy are to be referred to the Department of the Interior (DOI) Solicitor’s Office.
G. Miscellaneous bills. Bills issued outside of the reimbursable agreement program. The majority of these bills are issued by OFM for refunds owed by current and former employees. These debts include overpayments received by the employee, unpaid health benefit balances as a result of being on leave without pay (LWOP) status, amounts owed by former employees under training agreements, travel-related debts, etc. OFM is responsible for reviewing the status of these bills.
3. Responsibilities. The billing offices, Fiscal Services offices, and OFM are responsible for actions pertaining to delinquent debts.
A. Billing Offices.
(1) Include concise billing terms in reimbursable agreements. Billing terms in agreements with or orders from other Federal agencies are to indicate that billing will be accomplished via Department of the Treasury’s (Treasury) Intra-Governmental Payment and Collection (IPAC) system, unless otherwise required by the customer.
(2) Issue bills according to the terms of a reimbursable agreement or an order for the sale of maps or products, or as determined through administrative reviews, in accordance with Survey Manual (SM) 336.1, SM 336.2, or OFM IM 2003-04.
(3) Review the monthly FFS report number 289A, Monthly Status of Billings and Collections, and prepare a Review of 289A Report (289A Review) in accordance with USGS IM APS 2003-12 to ensure that agreements, billings, collections, and IPAC transactions posted properly in FFS. Science/field centers will complete the Review of 289A Report and forward it through the appropriate Fiscal Services office to OFM.
(4) Review the monthly Aging Reports and prepare the monthly Account Receivable Status Report (see Section 6.B). Science/field centers will complete the Status Report (Figure 1) and forward it through the appropriate Fiscal Services office.
(5) Prepare a quarterly certification including the 289A Review and Status Report in accordance with USGS IM APS 2003-14.
(6) Contact customers whose bills have become delinquent more than 60 days at least twice to obtain the status of payment.
(7) Ensure that customers who have entered into payment plans (see Section No. 6.C.(3)) are making payments in accordance with the terms specified in the plan.
B. Fiscal Services Offices.
(1) Review reimbursable agreements, or assist science/field centers in the preparation of agreements, to ensure they include concise billing terms.
(2) Review the 289A Review prepared by the science/field centers in accordance with APS IM 2003-12 and forward the reports to OFM, Accounts Receivable Branch (ARB).
Approve requests from billing offices to cancel or modify bills and forward approved requests to ARB for processing. Fiscal Services offices will ensure that cancellation/modification requests are in accordance with billing terms of the agreement.
(3) Review the science/field center’s Monthly AR Status Report and forward the Reports to ARB.
(4) Prepare a consolidated certification including the 289A Review and Status Report in accordance with USGS IM APS 2003-12.
(5) Request ARB to initiate referral of bills to Treasury when they reach 180 days delinquent, or prior to a bill becoming 180 days delinquent if the customer does not respond to USGS contacts to obtain the status of payment.
(6) Coordinate actions with ARB to identify and correct bills and/or collections that have been recorded incorrectly.
C. Accounts Receivable Branch
(1) Processes bills into FFS and applies collections to the appropriate accounts receivable.
(2) Processes and mails demand (dunning) letters and attaches the Notification of Action in the Event of Delinquency in order to provide delinquent debtors due process notification of actions to be initiated in case of nonpayment.
(3) Reconciles account receivable reports to open file records and the Aging Reports to the general ledger.
(4) Initiates action in response to the Status Reports completed by the billing offices and reviewed by the Fiscal Services office.
(5) Manages the status of miscellaneous bills issued by administrative support offices, such as payroll debts owed by employees, training, and travel debts, etc.
(6) Refers debts with appropriate documentation to Treasury (see Section 6.C.).
(7) Prepares receivable reports to DOI, Treasury, and others as required.
4. Billing Process summary.
A. Federal Agencies. Billings to Federal agencies are normally processed through Treasury’s IPAC system in accordance with SM 336.1. The IPAC billings generate an immediate transfer of funds between agencies. Bills issued to Federal agencies outside of the IPAC system are accomplished via form SF-1080. Although the manual SF-1080 has been replaced by the IPAC system, some Federal offices may request billing offices to use the SF-1080. The SF-1080 may be used when a Federal customer certifies in the agreement, or subsequently in writing, that they cannot process IPAC billings. The billing office should notify the Chief, ARB when a customer requires billing via SF-1080 (the notification can be made via e-mail or by sending a fax copy of the agreement). The SF-1080 bills are recorded in FFS as accounts receivable and are aged in accordance with Treasury aging requirements.
B. Non-Federal Customers. Billings issued to non-Federal customers are accomplished via form DI-1040 in accordance with SM 336.2 and OFM IM 2003-04. The DI-1040 bills are recorded into FFS as accounts receivable and are aged in accordance with Treasury aging requirements.
5. FFS Reports.
A. Reimbursable Agreements. Billings processed by ARB are recorded into the Account Receivable Header and Account Receivable Line Tables (ARHT/ARLT) in FFS. Collections are recorded on the Cash Receipt Header and Cash Receipt Line Tables (CRHT/CRLT) tables in FFS. These transactions processed under reimbursable agreements are listed in detail on the report number 289A in the month the transactions were processed in FFS and are summarized by cost center in the monthly Aging reports. These reports list all bills with outstanding balances and ages the balances due based on the difference between the report date and the bill's due date. These reports also include an Outstanding Status Code Table (OSCT) column on the right-hand side of the report. These 2-character codes indicate the latest status of each bill as reported to ARB. These codes are listed and defined on the OSCT table in FFS, and are input by ARB to the ARHT record based on the latest status of the bill.
B. Revenue Agreements. Bills and collections for revenue agreements (Geography discipline sales) are not included on the 289A. This information will be provided via supplemental monthly Crystal reports.
6. Status Review Procedure.
A. Monthly report review and reconciliation. As noted in section 3, billing offices are to review monthly report number 289A to verify that billings, collections, and IPAC transactions were processed against the correct agreement. Detailed transaction information pertaining to billings and collections under reimbursable agreements is found in the Customer Agreement Receivable/Collection Table (CACR) in FFS.
The ARB is responsible for the review of “miscellaneous” billings, such as payroll debts owed by current or former employees, travel-related debts, etc. Miscellaneous debts will appear on the Aging Report of the cost center that was charged with the original expenditure that created the debt. For example, if an employee was paid for hours not worked, the debt will be established against the account number charged for these hours. Collection of the debt will be credited to that same account number. Debts listed under the following Customer Numbers on the Aging Report are normally OFM’s responsibility:
(1) PR DEBT – Payroll debts owed by an employee.
(2) 26999 – Health benefit debts owed by an employee.
(3) 170** – Miscellaneous billed receivables not billed by the cost center.
B. Monthly Accounts Receivable Status Report (Status Report). The Status Report (Figure 1) is to be prepared monthly by billing offices to verify that bills are correctly recorded on the Aging Report and to certify that all delinquent bills have been reviewed and follow up action taken. The Status Report will include all bills issued by the office that have become more than 60 days delinquent and is to be forwarded to the appropriate Fiscal Services office. Figure 1 provides a suggested format for the report and a sample completed report. Completed reports are due to the appropriate the Fiscal Services office by the 15th of the following month. The Fiscal Services office will provide a consolidated report to ARB by the 20th of the following month.
The status of each bill should include the latest response from the customer pertaining to the status of payment of each bill and the follow up actions taken by the billing office regarding each bill. The Status Report can also be used to advise ARB of an error with the bill and request ARB to take corrective action (i.e., the bill included an incorrect BFY, ARB established the bill with the wrong amount in FFS, etc.). When a bill becomes more than 60 days delinquent, the billing office is to contact the customer in writing or via e-mail, informing the customer that payment has not been received and to request the customer to provide the status of the payment within 30 days. Based on the status provided in the status report, ARB will update the OSCT status of the bill on the ARHT. The billing office is required to continue to provide monthly status of each bill even though a status has been previously provided and that status has not changed. The billing office’s file should document correspondence with the customer regarding the bill.
Listed below are examples of the status of bills commonly provided by the billing offices. Also included are the actions ARB will initiate based on the status provided:
(1) No response received from the customer. This would indicate that the billing office contacted, or attempted to contact, the customer and received no response. The ARB will maintain a ‘blank’ OSCT code to indicate there is no status reported. In cases where the customer does not reply to the billing office’s requests for status of payment, the debt may be referred to Treasury prior to becoming 180 day delinquent. If the customer does not provide adequate status or does not dispute the debt, and the debt becomes 180 days delinquent, the billing office may request ARB to refer the debt to Treasury. If the debt is referred, ARB will adjust the OSCT code to “TR” (Treasury Referral).
(2) Customer disputes the bill. If a customer disputes a bill, the customer must provide a letter to the billing office detailing the reason(s) the debt is disputed. A copy of a letter from the customer should be provided to ARB and the Fiscal Services office to support the disputed status. The ARB will adjust the OSCT code in the ARHT table to “DP” (Disputed). If the dispute cannot be resolved by the billing office, the matter is to be referred to the appropriate Fiscal Services office, and if necessary, to the appropriate Regional Executive or the appropriate Headquarters Associate Director. If the dispute cannot be resolved within 60 days and the debt exceeds $2,500, the Fiscal Services office will indicate the status to ARB for referral of the debt to the DOI Solicitor for resolution (ARB will change the OSCT code to “SO” indicating that the debt has been referred to the DOI Solicitor). Debts less than $2,500 that cannot be resolved will be written off based on the recommendation of the appropriate Fiscal Services office, and if necessary, to the appropriate Regional Executive or the appropriate Headquarters Associate Director.
(3) Work is not completed under an agreement. If the work under the terms of the agreement is not completed and the agreement indicates that the final bill will not be due until the product is completed, the bill will be cancelled. The ARB will cancel the bill upon notification from the Fiscal Services office that a bill was issued prior to the completion of work. The billing office will notify the customer that the bill is canceled and that a new bill will be issued when work is complete. (Note: When a bill is canceled in FFS, the unbilled balance of the agreement originally billed on the number 289 will increase by the amount of the canceled bill. The bill will no longer be listed on the Aging Report).
(4) The customer indicates that their funding for the agreement has expired. The billing office should notify ARB and the Fiscal Services office and immediately provide a copy of the agreement and supporting documentation to ARB via the Fiscal Services office for review. If it is determined that the work was completed and billed in accordance with the agreement, ARB will immediately notify the customer that the debt will be referred to the DOI Solicitor unless the payment is received within 30 days. The ARB will adjust the OSCT code in the ARHT table to “DP” (Disputed), and adjust it to “SO” (Solicitor’s Office) upon referral to the DOI Solicitor.
(5) The customer indicates that payment has been processed and sent. If payment has not been received, the billing office is to request the check number or a copy of the check or other payment documentation identifying the payment from the customer. After the debt becomes 180 days delinquent and the customer does not provide evidence of payment, ARB will refer the debt to Treasury.
(6) The customer requests to enter into a payment plan. Payment plans are usually initiated when the debtor can substantiate that immediate full payment of the debt will create a financial hardship on the debtor. The ARB will adjust the OSCT code to “PP” (Payment Plan) when a payment agreement is approved ((see Section 6.C.(3)).
C. Actions based on the status provided. The ARB will initiate action based on the status provided by the billing office. These actions include:
(1) Canceling/Modifying a bill. When a bill is issued and is in accordance with the billing terms of the agreement, it will not be cancelled unless a modification to the agreement is provided by the billing office. When a bill is issued which is not in accordance with the agreement, such as issued prior to completion of work required in the terms of the agreement, a copy of the bill will be forwarded to the Fiscal Services office which will review the agreement terms and forward a copy of the bill to OFM for cancellation or modification. The billing office will reissue a bill upon completion of the requirements or as otherwise required. (Note: Cancelled bills are indicated by an “M” in the Action field of the receivable record on the Document Cross Reference Inquiry Table (DXRF) in FFS, indicating the bill was modified to $0).
(2) Referring a debt to Treasury or to the DOI Solicitor. Eligible debts that become more than 180 days delinquent and have been issued in accordance with the agreement must be referred to Treasury in accordance with the DCIA. As noted in 6.B above, debts owed by customers who fail to respond to dunning letters and/or follow up inquiries from the billing offices may be referred to Treasury prior to the debt becoming 180 days delinquent. Billing offices will be required to provide a copy of the items listed below to the Fiscal Services office which will review the file for completeness and forward to ARB in order to support the referral. Debts that are disputed by the customer and cannot be resolved as provided in Section 6.B shall be referred to the DOI Solicitor for a determination or litigation.
(a) A copy of the agreement;
(b) Copies of correspondence pertaining to the completion of the work required in the terms of the agreement; and
(c) Copy of the bill.
(3) Payment Plan. A payment plan may be entered into when the debtor can document that paying the entire bill in one payment will create a financial hardship. Payment plans are not used merely for the convenience of the debtor. In order to initiate a payment plan, a Payment Agreement (see Figure 2) must be completed and signed by the appropriate Regional Executive or the appropriate Headquarters Associate Director. The terms of a payment plan normally allow for monthly or quarterly payments to be made with minimum payments of $100, and usually requiring the debt to be paid in full within 12 months.
The signed payment plan is to be forwarded to the Chief, OFM for signature and processing. The ARB will change the OSCT code to “PP” to indicate a plan has been approved. The billing office will be responsible for monitoring the status of the bill and adherence to the terms of the payment plan. If the customer does not adhere to the terms of the payment plan, the billing office will note on the Status Report that payment has not been received in accordance with the plan. The ARB will refer the debt to Treasury in accordance with the Status Report.
(4) Write offs. Write offs are a result of a determination that a billed amount is uncollectible, meaning that there is no chance of collection. Write offs are also made on debts where a determination is made that the continued attempt to collect the debt is not in the best interest of the Government or that it is not cost effective to pursue collection. Debts are written off under the following circumstances:
(a) Debts less than $25 that become delinquent and are determined uncollectible by the billing office or ARB. Treasury does not accept debts less than $25 for referral.
(b) Debts that are “not eligible” for referral (as defined in Section 2.F) and are determined by the billing office to be uncollectible and concurred with by the Fiscal Services office and ARB.
(c) Debts that are eligible for referral but are determined not to be “in the best interest of the Government” or not cost effective to pursue collection prior to referral. Such determinations are to be made jointly by the Fiscal Services office and the Chief, OFM.
(d) Debts determined by Treasury to be uncollectible. Based on this determination, Treasury will terminate or suspend collection action, which is justification for the USGS to write off the debt.
(e) Debts referred to the DOI Solicitor that are determined by the DOI Solicitor to be uncollectible or not in the best interest of the Government to pursue. Based on this determination, the DOI Solicitor will terminate or suspend collection action, which is justification for the USGS to write off the debt.
A debt that exceeds $100,000 is to be reviewed by the Department of Justice for concurrence prior to write off of the debt.
The Chief, OFM will notify the billing office and the appropriate Fiscal Services office of amounts to be written off as a result of: (a) a termination of collection action by Treasury, or (b) a determination by the DOI Solicitor, Department of Justice, or USGS that it is not in the best interest of the Government or that is not cost effective to pursue collection of the debt. The Fiscal Services office will notify the appropriate Regional Executive or the appropriate Headquarters Associate Director in order to obtain concurrence with the write off.
The Chief Financial Officer (CFO) has delegated authority to terminate collection of debts prior to the referral of a debt to Treasury. The CFO will obtain the concurrence of the appropriate Regional Executive or the appropriate Headquarters Associate Director prior to approving the write off of reimbursable debts not to be referred to Treasury.
Note: Canceled bills differ from write offs. Canceled bills include amounts that are “reversed” in FFS after a determination that the bill was in error. Bills that are written off are valid billed amounts that are determined uncollectible.
7. Treasury Referrals and Collections.
A. Referrals. Debts are referred to Treasury for additional collection action. Treasury’s procedure is to send a letter on Treasury letterhead to the debtor to initiate collection action. If payment is not received within the period specified on the letter, Treasury will refer the debt to one of their contracted collection agents, refer the debt to the Treasury Offset Program (TOP) for offsetting the debt against future Treasury payments issued to the debtor, and report the debt to national credit bureaus. When debts are referred to Treasury, responsibility for the debt also transfers to Treasury. Debtors who contact the USGS regarding a referred debt are to be instructed to contact Treasury as indicated on Treasury’s letter issued to the customer.
B. Collections. Collections received by Treasury on behalf of the USGS will be forwarded to the USGS via an IPAC payment. Treasury retains a collection fee (currently 18 percent) on all amounts collected on bills referred to Treasury. The fee increases to 26 percent if the collection is made after Treasury refers the debt to one of their contracted collection agencies. The ARB will apply the payment from Treasury to the outstanding bill. If the net amount forwarded by Treasury is less than the amount due from the debtor, the balance remaining continues to be a delinquent debt owed by the customer.
Below is an example of the actions taken on a sample delinquent debt referred to Treasury:
(1) A debt of $100,000 is less than 180 days delinquent and the billing office indicates on the Status Report that the debtor either refuses to pay the debt or the debtor does not respond to the office’s requests for status of the payment, OR
(2) The debt becomes 180 days delinquent and the billing office indicates that the debtor can provide no reason for non-payment. The billing office will submit, through the Fiscal Service office, a copy of the required documentation supporting the bill and correspondence with the debtor;
(3) The Chief, OFM will refer the debt to Treasury by signing a Certification that the debt is “due and just” and attaching required documentation;
(4) After the debt has been referred to Treasury, the debtor makes a payment of $100,000. Treasury retains an 18 percent fee ($18,000) for collection and forwards the balance of the collection ($82,000) to the USGS;
(5) The ARB applies the collection of $82,000 to the receivable leaving a delinquent balance of $18,000 in FFS still owed by the debtor;
(6) Treasury will continue to attempt to collect the remaining balance due;
(7) If Treasury cannot collect the balance or any portion of the debt, or determines that the debt is otherwise uncollectible, Treasury will notify ARB of the termination or suspension of collection action on the debt;
(8) The Chief, OFM will notify the billing office and the appropriate Fiscal Services office of amount to be written off as a result of a termination of collection action; and
(9) The write off transaction will be listed on the 289A report in the month the transaction was processed.
Questions pertaining to this chapter should be directed to the OFM, ARB, on 703 648-7665.
Carol F. Aten
Chief, Office of Administrative Policy and Services