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By Birmingham Debt Management Operations Center
The Department of the Treasury, Financial Management Service (FMS), through its Cross-Servicing Program, can assist agencies in collecting delinquent debt by Administrative Wage Garnishment (AWG).
As authorized by the Debt Collection Improvement Act of 1996 (DCIA) (codified at 31 U.S.C. § 3720D), AWG allows federal agencies to garnish up to 15 percent of disposable pay of debtors who do not work for the federal government. It also allows debtors the option to pay their debts rather than be garnished by the Department of Treasury—a good negotiating tool for agencies.
Federal agencies that choose to use AWG must request their agency profiles be updated to participate in AWG. Before modifying their profiles, agencies must either adopt Treasury rules regarding hearing procedures, or they may prescribe their own regulations for the conduct of AWG hearings consistent with Treasury rules pursuant to 31 C.F.R. § 285.11(f).
Previously, AWG was only available for Consumer debts, as of March 2009, AWG also became available for Commercial debts with individual liability. This will increase the currently eligible debt for AWG by over $300 million.
Over the past year, many additional agencies have become active in AWG: Department of Agriculture, Small Business Administration, Department of Interior, State Department, CIA, Presidio Trust, and within the next few months, Department of Transportation. There are currently 22 active AWG agencies, 14 of those being CFO agencies. FMS is committed to assisting federal agencies with AWG implementation to ensure government-wide participation.
FMS will also be implementing use of the Department of Health and Human Service’s National Directory for New Hires (NDNH) to locate employer information for delinquent debtors. This tool will further improve FMS’s ability to locate additional employers for AWG orders, thus increasing collections. NDNH was implemented in May 2009.
Collections through the use of AWG have been very successful for the participating federal program agencies. From FY01 through February 2009, the AWG program has collected over $27.8 million dollars of delinquent debt. This does not include debts voluntarily collected as the result of an AWG notice. AWG has proven to be a very effective collection tool.
Treasury’s rules governing AWG may be found on the FMS website at:
fms.treas.gov/debt/awg.html. To request a meeting to discuss participation in AWG, please contact Debbie Davenport at 202-874-6653.
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