Dec 17, 1997
Press Release

Washington, DC -- December 17, 1997. After weathering strong bipartisan criticism at a hearing in front of the House Subcommittee on Government Management Information and Technology on November 12, the Treasury Department announced drastic management changes to its Financial Management Service (FMS).

On December 10, the Treasury Department offered buyouts and/or reassignements for 17 senior executive service employees including FMS Commissioner Russell Morris and Deputy Commissioner Michael Smokovich. Furthermore, Fiscal Assistant Secretary Gerald Murphy will be reassigned to become a senior advisor to the Under Secretary.

At the hearing, Rep. Maloney chastised the Department for collecting only $10 million out of $50 billion in delinquent non-tax debt since her Debt Collection Improvement Act (DCIA) became law. However with these changes, the Department has assured Rep. Maloney that the DCIA will be put on the right track.

Rep. Maloney commented, "The Treasury Department's actions represent one of the biggest agency restructurings of the Clinton Administration. I am cautiously optimistic that these management changes will have a positive effect on the implementation of our Debt Collection Improvement Act. At our hearing, I had hoped that FMS could show us how they have collected hundreds of millions of dollars through the new debt collection tools we have given them. Instead, the Treasury officials informed us that the cost of implementation exceeded the additional revenues and that in a year and a half they have collected only $ 1 dollar for every $20,000 dollars that is owed. That's humiliating, and in itself indicates a serious management problem."

Rep. Maloney authored the Debt Collection Improvement Act which became law in April 1996. That bill centralized the Federal collection at the Department of Treasury and gave all Federal agencies the tools needed to collect billions of dollars of delinquent non-tax debt.


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