	Introduction

The collection of outstanding criminal debt has been a long-standing  problem, with many of the issues that we have been reporting on since  October 1985 still remaining. Since that time, as reported in the U.S.  Attorneys’ statistical reports, the balance of outstanding criminal debt has  grown from $260 million to over $13 billion (see figure 1). Objectives, Scope, and Methodology

Our objectives, as agreed to by the subcommittee staff, were to determine  (1) the key reasons for the growth in reported uncollected criminal debt,  (2) whether adequate processes exist to collect criminal debt, and (3) what  role, if any, the Office of Management and Budget (OMB) or the  Department of the Treasury (Treasury) plays in overseeing and monitoring  the government’s collection of criminal debt. Assessment of Mandatory Restitution

Before the Mandatory Victims Restitution Act of 1996 (MVRA), the  assessment of restitution, like the assessment of fines, was typically based  on an offender’s ability to pay. We found that the payment schedules set by judges can significantly  influence collection efforts. State law may limit the type of property that  can be seized and the amount of wages that can be garnished. However, since that effort was  terminated in 1996, as noted in chapter 1, the collection responsibilities  continue to be fragmented between Justice and the courts, with neither  having a central management oversight role. Moreover, neither OMB nor Treasury has identified the need to take an  active role in overseeing the federal government’s process for collecting the  billions of dollars of outstanding criminal debt. In the interim, while the task force is being established, we are making the  following specific recommendations to the entities involved in criminal  debt collection: To help improve collections and stem the growth in reported uncollected  criminal debt, we recommend that  the Secretary of the Treasury, through the Department of Treasury’s  (Treasury) Financial Management Service, assist the Department of  Justice and the courts in identifying the types of delinquent criminal  debt that would be eligible for referral to Treasury for collection actions;  the Attorney General and the Director of the AOUSC continue to work  together to (1) reduce duplication of data entry for collections and  disbursements, (2) require the Financial Litigation Units (FLUs) and the  courts to periodically reconcile payment data recorded in their separate  tracking systems, and (3) revise district guidance so that the FLUs can  take a more proactive role in monitoring collection efforts of probation  offices;  establish policies and procedures that require Justice investigating  case agents and prosecuting attorneys to share relevant financial  information with the FLUs within an established time frame after an  offender is sentenced,  require FLUs to document correspondence with case agents and  prosecuting attorneys in the FLU files, including whether and why  efforts were not coordinated,  require FLUs to use collectibility analyses to prioritize criminal debt  collection efforts on debt types deemed through historical  experience to be more collectible,  reinforce current policies and procedures for entering cases into  criminal debt tracking systems; filing liens; issuing demand letters,  delinquent notices, and default notices; performing asset discovery  work; using other enforcement techniques; and using event codes,  including suspense codes,  revise current policies for issuing demand letters, specifying when a  demand letter should be sent and within what time frames,  require FLUs to establish time frames for procedures related to  criminal debt collection activities that do not currently have  established time frames,  require FLUs to document in their files instances where asset  discovery work was not performed and why it was not performed,  establish a policy for the FLUs to date stamp when Judgments in a  Criminal Case are received,  revise interest and penalty policies so that interest and penalties are  consistently assessed and reported,  adequately measure criminal debt collection performance against   revise the FLU’s databases to (1) capture needed information such as  terms of fine and restitution order, status of offender (expected  release date from prison or probation) and (2) allow FLUs to allocate  outstanding amounts between amounts likely to be collected and  those that are not likely to be collected, and  perform an analysis to assess whether the FLU’s human capital  resources and training are adequate to effectively perform their  collection activities; and   the Director of the Administrative Office of the U.S. Courts  ensure and monitor effective implementation of guidance for  (1) developing pre-sentence reports, (2) establishing and monitoring  offenders’ compliance with installment schedules, (3) providing  financial information reported in the pre-sentence report to the FLUs  within an established time frame after sentencing, and (4) notifying  FLUs within an established time frame before an offender is released  from supervision,  revise guidance to encourage the clerk’s office to provide a copy of  the Judgment in a Criminal Case to both the FLU and the prosecuting  attorney within the established time frame,  continue to work with the clerk’s offices to process all pre-MVRA  restitution so that the same entity in all districts is responsible for  receiving and disbursing pre- and post-MVRA restitution,  revise the language in the Judgment in a Criminal Case forms to  clarify that payment terms established by judges are minimum  payments and should not prohibit or delay collection efforts, and  establish cost-effective thresholds for disbursements made by check  to victims for restitution payments.
Why GAO Did This Study

The collection of outstanding criminal debt has been a long-standing problem for the federal government. Since October 1985, as reported in the U.S. Attorney's statistical reports, the balance of outstanding criminal debt has grown from $260 million to more than $13 billion. Currently, the receipting of collections and recordkeeping for criminal debt is primarily the responsibility of the U.S. Courts, while the Department of Justice is responsible for collecting criminal debt. This report reviews (1) the key reasons for the growth in reported uncollected criminal debt; (2) whether adequate processes exist to collect criminal debt; and (3) what role, if any, the Office of Management and Budget (OMB) and the Department of the Treasury play in monitoring the government's collection of criminal debt.

What GAO Found

GAO found that four key factors have contributed to the significant growth of uncollected criminal debt. These factors are (1) the nature of the debt, in that it involves criminals who may be incarcerated or deported or who have minimal earning capacity; (2) the assessment of mandatory restitution regardless of the criminal's ability to pay, as required by the Mandatory Victims Restitution Act of 1996; (3) interpretation by the Financial Litigation Units of payment schedules set by judges which limit collection activities; and (4) state laws that may limit the type of property that can be seized and the amount of wages that can be garnished. Financial Litigation Units do not always follow their policies and procedures to ensure that collection actions are prompt and adequate. The present management practices and processes do not ensure that offenders are deprived of their ill-gotten gains and that innocent victims are compensated for their losses to the fullest extent possible. Collection responsibilities continue to be divided between Justice and the courts, with neither having a central management oversight role. Neither OMB nor Treasury has identified the need to take an active oversight role in the collection of the growing balance of outstanding criminal debt.