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AUTHORITY: 31 U.S.C. 3701-3719; 5 U.S.C. 5514; 22 U.S.C. 2658; 22 U.S.C. 3926; 4 CFR parts 101-105; 5 CFR part 550
SOURCE: 54 FR 13365, Apr. 3, 1989, unless otherwise noted.
Subpart A-General Provisions
Affairs any data or information pertinent to a claim. $33.12 Penalties.
Persons who willfully make any false or misleading statement or representation to obtain compensation from the Fund are subject to criminal prosecution under 22 U.S.C. 1980(g). This provides penalties up to $25,000 or imprisonment for up to one year, or both. Any evidence of criminal conduct will be promptly forwarded to the United States Department of Justice for action. Additionally, misrepresentation, concealment, or fraud, or acts intentionally designed to result in seizure, may void the guaranty agreement.
8 34.1 Purpose.
These regulations prescribe the procedures to be used by the United States Department of State (STATE) in the collection of claims owed to STATE and to the United States.
PART 34-COLLECTION OF DEBTS
Subpart A-General Provisions
Sec. 34.1 Purpose. 34.2 Scope. 34.3 Definitions. 34.4 Interest, penalty, and administrative
charges. 34.5 Exceptions. 34.6 Use of procedures. 34.7 Other procedures or actions. Subpart B-Administrative Offset and
Referral to Collection Agencies 34.8 Demand for payment. 34.9 Collection by administrative offset. 34.10 Administrative offset against amounts
payable for Civil Service Retirement and
Disability Fund. 34.11 Collection in installments. 34.12 Exploration of compromise. 34.13 Suspending or terminating collection
action. 34.14 Referrals to the Department of Justice
or the General Accounting Office. 34.15 Collection services.
8 34.2 Scope.
(a) Applicability of Federal Claims Collection Standards (FCCS). Except as set forth in this part or otherwise provided by law, STATE will conduct administrative actions to collect claims (including offset, compromise, suspension, termination, disclosure and referral) in accordance with the FCCS of the General Accounting Office and Department of Justice, 4 CFR parts 101–105.
(b) This part is not applicable to:
(1) Claims against any foreign country or any political subdivision thereof, or any public international organization.
(2) Claims where the STATE Comptroller or his designee determines that the achievement of the purposes of any provision of law administered by STATE require a different course of action.
Subpart C-Salary Offset
34.16 Scope. 34.17 Coordinating offset with another fed
eral agency. 34.18 Notice requirements before offset. 34.19 Request for a hearing. 34.20 Hearings. 34.21 Review of STATE records related to
the debt. 34.22 Written agreement to repay as alter
native to salary offset. 34.23 Procedures for salary offset. 34.24 Non-waiver of rights by payments. 34.25 Refunds.
$ 34.3 Definitions.
(a) A debt or claim refers to an amount of money which has been determined to be owed to the United States from any person, organization or entity, except another Federal Agency. A debtor's liability arising from a particular contract or transaction shall be considered a single claim for purposes of the monetary ceilings of the FCCS.
(b) Delinquent means a debt that has not been paid by the date specified in STATE's written notification or applicable contractual agreement, unless other satisfactory arrangements have been made by that date, or that has not been in accordance with a payment agreement with STATE.
(c) Disposable pay means the amount that remains from an employee's Federal pay after required deductions for Federal, State and local income taxes; Social Security taxes, including Medicare taxes; Federal retirement programs; premiums for life and health insurance benefits and such other deductions that are required by law to be withheld including garnishments.
the part of the debtor or any other party having an interest in the claim, shall be referred to the Department of Justice for compromise, suspension, or termination of collection action.
(d) Tax claims are excluded from the coverage of this regulation. $34.6 Use of procedures.
Procedures authorized by this regulation (including but not limited to referral to a debt collection agency, administrative offset, or salary offset) may be used singly or in combination. 8 34.7 Other procedures or actions.
(a) Nothing contained in this regulation is intended to require STATE to duplicate administrative proceedings required by contract or other laws or regulations.
(b) Nothing in this regulation is intended to preclude utilization of informal administrative actions or remedies which may be available.
(c) Nothing contained in this regulation is intended to deter STATE from demanding the return of specific prop erty or from demanding the return of the property or the payment of its value.
(d) The failure of STATE to comply with any provision in this regulation shall not serve as defense to the debt.
$ 34.4 Interest, penalty, and adminis
trative charges. (a) Except as otherwise provided by statute, contract or excluded in accordance with FCCS, STATE will assess:
(1) Interest on unpaid claims in accordance with existing Treasury rules and regulations.
(2) Penalty charges at 6 percent a year on any portion of a claim that is delinquent for more than 90 days.
(3) Administrative charges to cover the costs of processing and calculating delinquent claims.
(4) Late payment charges shall be computed from the date of mailing or hand delivery of the notice of the claim and interest requirements.
(5) When a debt is paid in partial or installment payments, amounts received shall be applied first to outstanding penalty and administrative cost charges, second to accrued interest, and then to outstanding principal.
(6) Waiver. STATE shall consider waiver of interest, penalty charges and or administrative charges in accordance with the FCCS, 4 CFR 102.13(g). $ 34.5 Exceptions.
(a) Claims arising from the audit of transportation accounts pursuant to 31 U.S.C. 3726 shall be determined, collected, compromised, terminated, or settled in accordance with the regulations published under 31 U.S.C. 3726 (see 41 CFR part 101-41).
(b) Claims arising out of acquisition contracts subject to the Federal Acquisition Regulation (FAR) shall be determined, collected, compromised, terminated, or settled in accordance with those regulations (see 48 CFR part 32).
(c) Claims based in whole or in part on conduct in violation of the antitrust laws, or in regard to which there is an indication of fraud, presentation of a false claim, or misrepresentation on
Subpart B-Administrative Offset
and Referral to Collection Agencies
8 34.8 Demand for payment.
(a) A total of three progressively stronger written demands at approximately 30-day intervals will normally be made, unless a response or other information indicates that additional written demands would either be unnecessary or futile. When necessary to protect the Government's interest, written demand may be preceded by other appropriate actions under the FCCS, including immediate referral for litigation and/or offset.
(b) The initial written demand for payment shall inform the debtor of:
(1) The basis of the claim;
(3) The date when payment is due 30days from the date of mailing or hand delivery of the initial demand for payment;
(4) The provision for late payment (interest), penalty and administrative charges, if payment is not received by the due date.
(5) The right of the debtor to offer to make a written agreement to repay the amount of the claim.
(6) The notice of offset need not include the requirements of paragraphs (c) (3), (4), or (5) of this section if the debtor has been informed of the requirements at an earlier stage in the administrative proceedings, e.g., if they were included in a final contracting officer's decision.
(d) STATE will promptly make requests for offset to other agencies known to be holding funds payable to a debtor and, when appropriate, place the name of the debtor on the "List of Contractors Indebted to the United States". STATE will provide instructions for the transfer of funds.
(e) STATE will promptly process requests for offset from other agencies and transfer funds to the requesting agency upon receipt of the written certification that the person owes the debt and that, if a Federal employee, the employee has been given the procedural rights required by 5 USC 5514 and 5 CFR part 550, subpart K.
$34.9 Collection by administrative off
set. (a) Offset will be used whenever feasible and not otherwise prohibited. Offset is not required to be used in every instance and consideration should be given to the debtor's financial condition and the impact of offset on STATE programs or projects.
(b) The procedures for offset in this section do not apply to the offset of Federal salaries under 5 U.S.C. 5514.
(c) Before offset is made, STATE will provide the debtor with written notice informing the debtor of:
(1) The nature and amount of the claim;
(2) The intent of STATE to collect by administrative offset, including asking the assistance of other Federal agencies to help in the offset whenever possible, if the debtor has not made payment by the payment due date or has not made an arrangement for payment by the payment due date;
(3) The right of the debtor to inspect and copy STATE's records of the claim;
(4) The right of the debtor to a review of the claim within STATE. If the claim is disputed in full or part, the debtor shall respond to the demand in writing by making a request by the payment due date stated within the notice to the billing office for a review of the claim within STATE. The debtor's written response shall state the basis for the dispute. If only part of the claim is disputed, the undisputed portion must be paid by the date stated in the notice to avoid late payment, penalty and administrative charges. If STATE either sustains or amends its determination, it shall notify the debtor of its intent to collect the claim, with any adjustments based on the debtor's response by administrative offset unless payment is received within 30-days of the mailing of the notification of its decision following a review of the claim.
$ 34.10 Administrative offset against
amounts payable for Civil Service
Retirement and Disability Fund. (a) Unless otherwise prohibited by law, STATE may request that monies that are due and payable to a debtor from the Civil Service Retirement and Disability Fund, Federal Employee Retirement Fund, or the Foreign Service Retirement Fund be administratively offset in reasonable amounts in order to collect in one full payment or a minimal number of payments, debts owed the United States by the debtor. Such requests shall be made to the appropriate officials of the respective fund servicing agency in accordance with such regulations as may be prescribed by the Director of that agency.
(b) When making a request for administrative offset under paragraph (a) of this section, STATE shall include written statements that:
(1) The debtor owes the United States a debt, including the amount of the debt.
(2) STATE has complied with the applicable statutes, regulations, and procedures of the respective fund servicing agencies.
(3) STATE has complied with the re- $ 34.12 Exploration of compromise. quirements of 834.9 of this part.
STATE may attempt to effect com(c) Once STATE decides to request
promise in accordance with the standoffset under paragraph (a) of this sec
ards set forth in part 103 of the FCCS (4 tion, it will make the request as soon
CFR part 103). as practical after completion of the applicable procedures in order that the
$34.13 Suspending or terminating colfund servicing agency may identify the lection action. debtor's account in anticipation of the time when the debtor requests or be
The suspension or termination of col
lection action shall be made in accordcomes eligible to receive payments from the fund. This will satisfy any re
ance with the standards set forth in
part 104 of the FCCS (4 CFR part 104). quirements that offset will be initiated prior to expiration of the applicable
$34.14 Referrals to the Department of statute of limitations.
Justice or the General Accounting (d) If STATE collects part or all of Office. the debt by other means before deductions are made or completed pursuant
Referrals to the Department of Jus
tice or the General Accounting Office to paragraph (a) of this section, STATE shall act promptly to modify or termi
shall be made in accordance with the
standards set forth in part 105 of the nate its request for offset under para
FCCS (4 CFR part 105). graph (a) of this section. (e) This section does not require or
834.15 Collection services. authorize the fund servicing agency to review the merits of the STATE deter
(a) STATE has authority to contract mination relative to the amount and
for collection services to recover delinvalidity of the debt, its determination
quent debts in accordance with 31 on waiver under an applicable statute,
U.S.C. 3718(c) and part 102 of the FCCS or its determination whether to pro
(4 CFR part 102). vide an oral hearing.
(b) STATE may disclose delinquent
debts, other than delinquent debts of 8 34.11 Collection in installments.
current Federal employees, to conWhenever feasible, and except as re
sumer reporting agencies in accordance quired otherwise by law, debts owed to
with 31 U.S.C. 3711(f) and the FCCS. the United States, together with inter
(c) STATE will not use a collection est, penalties, and administrative costs
agency to collect a debt owed by a curas required by this regulation, should rently employed or retired Federal embe collected in one lump sum. This is
ployee, if collection by salary or annutrue whether the debt is being col
ity offset is available. lected under administrative offset or by another method, including vol
Subpart C—Salary Offset untary payment. However, if the debtor is financially unable to pay the in
$34.16 Scope. debtedness in one lump sum, payment (a) This subpart sets forth STATE's may be accepted in regular install- procedures for the collection of a Fedments. If STATE agrees to accept pay- eral employee's pay by salary offset to ment in installments, it will obtain a satisfy certain valid and past due debts legally enforceable written agreement owed the United States Government. from the debtor that specifies all of the (b) This subpart applies to: terms of the arrangement and which (1) Current employees of STATE and contains a provision accelerating the other agencies who owe debts to debt in the event the debtor defaults. STATE; The size and frequency of the payments (2) Current employees of STATE who should bear a reasonable relation to owe debts to other agencies. the size of the debt and ability of the (c) This subpart does not apply to debtor to pay. If possible the install- debts or claims arising under the Interment payments should be sufficient in nal Revenue Code of 1954 (26 U.S.C. 1 et size and frequency to liquidate the seq.); the Social Security Act (42 U.S.C. Government's claim within 3 years. 301 et seq.); the tariff laws of the United
States; or to any case where collection of a debt by salary offset is explicitly provided for or prohibited by another statute (e.g. travel advances in 5 U.S.C. 5705 and employee training expenses in 5 U.S.C. 4108).
(d) This subpart does not apply to any adjustment to pay arising out of an employee's election of coverage or a change in coverage under a Federal benefits program requiring periodic deductions from pay or ministerial adjustments in pay, if the amount to be recovered was accumulated over four pay periods or less.
(e) These regulations do not preclude an employee from:
(1) Requesting waiver of erroneous payment of salary, travel, transportation or relocation expense and allowances;
(2) Requesting waiver of any other type of debt, if waiver is available by statute; or
(3) Questioning the amount or validity of a debt by submitting a subsequent claim to the General Accounting Office.
(f) Nothing in these regulations precludes the compromise, suspension or termination of collection actions where appropriate under subpart A or other regulations.
8 34.18 Notice requirements before off
set. Except as provided in $34.16, salary offset deductions will not be made unless STATE first provides the employee with written notice that he/she owes a debt to the Federal Government at least 30 calendar days before salary offset is to be initiated. When STATE is the creditor agency, this notice of intent to offset an employee's salary shall be hand-delivered or sent by certified mail to the most current address that is available to the Department and will state:
(a) That STATE has reviewed the records relating to the debt and has determined that the debt is owed, its origin and nature, and the amount due;
(b) The intention of STATE to collect the debt by means of deduction from the employee's current disposable pay until the debt and all accumulated interest are paid in full;
(c) The amount, frequency, approximate beginning date, and duration of the intended deductions;
(d) The requirement to assess and collect interest, penalties, and administrative costs, or waiver are in accordance with $34.4, unless excused in accordance with $34.4(a)(6);
(e) The employee's right to inspect and copy any STATE records relating to the debt, or, if the employee or their representative cannot personally inspect the records, to request and receive a copy of such records;
(f) The opportunity (under terms agreeable to STATE) to enter into a written agreement establishing a repayment schedule of the debt in lieu of offset;
(g) The right to a hearing conducted by an official (administrative law judge or a hearing official not under the control of STATE) with respect to the existence of the debt, the amount of the debt, or the repayment schedule (i.e. the percentage of disposable pay to be deducted each pay period), so long as a request for a hearing is filed by the employee as prescribed in § 34.19;
(h) That the timely filing of a request for hearing within 30 calendar days after receipt of the notice of intent to offset will stay the commencement of collection proceedings;
$34.17 Coordinating offset with an
other federal agency. (a) When STATE is owed a debt by an employee of another agency, the other agency shall not initiate the requested offset until STATE provides the agency with a written certification that the debtor owes STATE a debt (including the amount and basis of the debt and the due date of payment) and that STATE has complied with these regulations.
(b) When another agency is owed the debt, STATE may use salary offset against one of its employees who is indebted to another agency, if requested to do so by that agency. Such request must be accompanied by a certification that the person owes the debt (including the amount and basis of the debt and the due date of payment) and that the agency has complied with its regulations as required by 5 U.S.C. 5514 and 5 CFR part 550, subpart K.