ACTION BULLETINS (PY 2003)

AB - 38 DEBT COLLECTION PROCEDURES

AB - 38
Effective Date: Immediately


ACTION BULLETIN


TO: All WIA Program Operators

DATE: May 28, 2004

SUBJECT: DEBT COLLECTION PROCEDURES


Purpose of Bulletin: This action bulletin provides guidance regarding policy and establishes procedures for the recovery of misexpended funds under the Workforce Investment Act (WIA). The purpose is to ensure that all funds administered by the Alameda County Workforce Investment Board (ACWIB) are properly accounted for and to recover, where feasible, monies owed to the County by any person or entity.

Citation(s):

· Workforce Investment Act, Sections 133 and 184 (c) and (d)
· Title 20 Code of Federal regulations (CFR) 667.500, 667.705, 667.720, 667.730 and 667.740
· State Directive WIAD01-5, “Debt Collection”


Policy:

The Alameda County WIB is responsible for sub-recipient and contractor audit resolution and aggressive debt collection action.

The settlement of all debts resulting from fraud, malfeasance, misapplication of funds or other serious violations or illegal acts must be cash from nonfederal sources. Funds collected by the County in settlement of these debts must be returned to EDD immediately on their receipt. The mailing address is:

Employment Development Department
Compliance Review Division, MIC 22M
P. O. Box 826880
Sacramento, CA 94280-0001



Definitions:

Final determination is the awarding agency’s decision to allow or disallow questioned costs and resolve any non-monetary findings.

Final debt is the amount owed based on the awarding agency’s final determination if an appeal is not filed, or the decision issued in response to an appeal. Included in final debts are funds due from, but not limited to, incidents of fraud, malfeasance, misapplication of funds or other serious violations or illegal acts.

Procedure:

1. When a sub recipient or subcontractor's liability is established as a result of an audit, monitoring finding or other means, the Alameda County WIB will notify the entity by certified mail of the following:

a. The amount of liability;

b. The WIB’s reason for establishing the debt;

c. The debt, if not resolved or if a satisfactory alternative repayment plan has not been negotiated, will become delinquent: within thirty- (30) days:

d. Potential sanctions for non-payment, which may include debarment:

e. The debtor's administrative appeal rights and procedures to submit appeals.

2. The WIB will establish and maintain a permanent record of all debt collection cases. The record will document all actions taken and will state why each action has been taken. Each case record shall include, at a minimum, the following:

a. Description of the specific debt and the basis upon which the debt owed to Alameda County was determined.

b. Copies of each written notification, with certified mail return receipt of delivery, sent to the sub recipient / contractor. As appropriate this will include the Initial Determination letter, the Second Notice letter sent 30 days later, and a Final Notification letter sent 30 days following the date of the Second Notice letter.


c. All other correspondence regarding the debt and its collection. This will include, but is not limited to, notes, memos and/or transcripts of each discussion and/or meeting (telephone, email, video-conference, in-person or hearing) with representatives of the sub recipient / contractor regarding the specific debt, its collection and/or repayment actions or plans.

d. A log identifying the current status of the case.

3. An accounts receivable control sheet will be maintained on the amount in question.

4. The WIB will negotiate any resolution of the debt or any agreed upon repayment schedule. Options for debt resolution that may be offered at the discretion of the WIB include cash or installment payments, offset against a subsequent grant, or a reduction in payments.

5. If the debt is not repaid or resolved in thirty (30) days: a second more strongly worded thirty (30) day notices will be sent. If no satisfactory resolution occurs at the end of the sixty (60) day period, a third and final collection letter will be issued.

The final collection letter will indicate that the WIB will impose one or more of the following sanctions:

a. Withholding payments due the subcontractor:

b. Initiate litigation against the subcontractor:

c. Withholding of future funding in accordance with the guidance at 29 CFR 97.36(b);

d. Termination of current agreements.

6. If the debt is still outstanding after ninety (90) days, from the date of Initial Notification, a determination will be made by the WIB to use another method of collection. In making this determination, consideration will be given to the following factors:

a. Amount of the debt;

b. Cost of further collection;

c. Amount collected to date, and;

d. Probable success of pursuing further action to collect the debt.

Before any debt is compromised or terminated an approval will be obtained from EDD.

7. The WIB may request that the State submit a waiver of liability to the U.S. Department of Labor of any disallowed cost if it can be demonstrated that such a request would satisfy the requirements as outlined in 20 CFR 667.720 of the WIA regulations.

Cash Repayments:

Any debt involving fraud or abuse shall be repaid in cash. Funds collected in settlement of these debts will be returned to Employment Development Department (EDD). The refund check will identify the title and year to which the misexpenditure was originally charged.

When the debt was not a result of fraud or abuse, the cash repayment of the disallowance is a credit to the title and year to which it was originally charged. If the year of allocation is still open, the WIB may expend the funds for program purposes. Cash payments received after the fund availability period must be remitted to the State.



ACTION:

The WIB and its sub-recipients adhere to this policy. This policy is effective immediately will remain in effect from the date of issue until such time that a revision is required.


Information & Inquiries:

For further information and inquiries, please contact:

Cotrell Ward, Management Analyst
(510) 259-3814
Cward@acgov.org