FR 2021-03385

The document from the Federal Register outlines a proposed rule by the U.S. Agency for International Development (USAID) to revise its claims collection regulations. The intention is to align USAID's procedures with the requirements of the Digital Accountability and Transparency Act of 2014 (DATA Act), among other statutory and regulatory provisions. The rule mandates that USAID refer overdue debts exceeding 120 days to the Department of the Treasury, in a bid to enhance the effectiveness of its debt collection efforts. Public comments on the proposed rule were solicited until March 31, 2021.

General Summary

This proposed rule by USAID represents a comprehensive update to its debt collection methods, aiming to incorporate modern practices and ensure compliance with existing laws. The chief purpose is to streamline the process and make it more efficient by referring certain overdue debts to the U.S. Treasury. The rule also looks to redefine specific terms and improve upon previous procedures, aligning them with the Debt Collection Improvement Act of 1996.

Significant Issues and Concerns

A primary concern is the document's use of technical legal jargon that may be challenging for the general public to grasp. Terms such as "recoupment," "administrative offset," and "withholding order" are not explained in layman's language, which might alienate those without a legal background.

The document frequently references compliance with several Executive Orders, yet it does not adequately explain how these Executive Orders specifically relate to the proposed changes. This may create confusion regarding the broader implications and necessity of these revisions.

Furthermore, the proposed rule states that USAID will reject insubstantial comments without clearly defining what qualifies as insubstantial. This lack of clarity could discourage public engagement or lead to the dismissal of potentially valuable insights.

Public Impact

For the general public, the decision to refer delinquent debts to the Treasury might result in more rigorous debt collection practices, potentially affecting individuals or entities with outstanding obligations to USAID. Those facing financial difficulties may find the rule's implementation taxing, as it potentially places their debts in the hands of a more aggressive collection apparatus.

The document's stipulations could also influence those within USAID and other Federal Agencies by necessitating changes in administrative procedures to align with the new rule. This may result in a demand for additional training or resources to ensure compliance with updated regulations.

Impact on Specific Stakeholders

For USAID, the revised regulations aim to enhance the agency's efficiency in collecting debts, which could improve financial accountability and resource management. This could be beneficial for stakeholders who depend on USAID's effective use of funds.

Creditors and service providers working in tandem with USAID might experience improvements in the handling of debts owed to them. Conversely, debtors liable to USAID could face more stringent enforcement actions.

For governmental agencies collaborating on these procedures, such as the Treasury's Bureau of the Fiscal Service, the rule promises to refine inter-agency cooperation and reduce the incidence of accumulated debts without repayment.

Ultimately, while the intended streamlining efforts may result in a more cohesive debt collection strategy, the absence of clear guidelines for waiving debts and discretion in enforcement might lead to inconsistent applications, potentially disadvantaging certain stakeholders.

The document discusses a proposed rule change by the U.S. Agency for International Development (USAID) focused on the handling of claims and debt collection. Throughout the regulation, there are several financial references and amounts that are relevant to understanding its implications and adherence to statutory requirements.

Financial Impact and Limitations

The regulation explicitly states that it will not result in an annual effect on the U.S. economy of $100 million or more. This establishes that the proposed changes are not seen as significantly altering the financial landscape. This is reinforced by the reference to the Unfunded Mandates Reform Act, which assures that neither state, local, nor tribal governments, nor the private sector, will incur expenditures of $100 million or more annually as a result of this rule. Such a statement suggests USAID anticipates minimal financial burden on these entities, which may ease concerns regarding potential adverse effects.

Limitations on Financial Authority

The regulation delineates USAID's financial authority regarding claims by stating a $100,000 limit on the Agency's authority to compromise a claim, suspend collection action, or terminate it. This limitation necessitates that claims exceeding this amount must be referred to the Department of Justice (DOJ) for further action. Such a stipulation underscores a structured process within governmental agencies to manage larger financial claims that exceed certain jurisdictional thresholds.

Delegation to the Department of Justice (DOJ)

For claims that exceed the $100,000 threshold, USAID references regulatory processes involving the DOJ. Any compromise offers for claims above this amount will be referred to DOJ's Commercial Litigation Branch, and debts that require litigation but are between $2,500 to $1 million are designated to DOJ’s Nationwide Central Intake Facility. Debts exceeding $1 million are directly forwarded to the Civil Division at the DOJ. This delegation of authority highlights a structured interagency financial management system for large, contentious claims.

Suspension and Termination of Debt Collection

The regulation allows the Chief Financial Officer (CFO) the power to suspend collection efforts on debts $100,000 or less if a waiver or administrative review is pending. This discretion can prevent unnecessary financial hardship while allowing due process for potential debt resolution or dispute.

Implications and Oversight Challenges

The financial references within this document relate to several issues identified, such as the potential for inconsistent application due to the discretionary power granted in financial decisions. For example, the authority the CFO holds over suspending or terminating collection activities on debts of $100,000 or less might lead to varied outcomes unless clearly defined guidelines are established. Moreover, the processes and decentralization of authority, particularly with debt amounts requiring DOJ involvement, emphasize a need for clear communication and oversight to prevent mismanagement or oversight issues.

In summary, the proposed rule extensively outlines USAID's processes for managing financial claims, with particular attention to maintaining control within established financial thresholds while ensuring high-level debts receive appropriate legal scrutiny. The financial structure appears to aim for efficiency and minimal economic disturbance, yet it poses challenges in terms of governance and clarity that require careful consideration and possibly further refinement.