OLYMPIA — Eight state programs could reap about $160 million by capturing just half of their outstanding debt, and government should work harder to get that money, Auditor Brian Sonntag said Tuesday.
Sonntag’s newest performance audit, a result of voter-approved Initiative 900, examines the state’s effectiveness in collecting overdue debts, such as taxes, loan payments and overpaid benefits.
Auditors targeted 10 state programs in six separate agencies. Those agencies account for about 70 percent, or $3.3 billion, of the state’s total “receivable” revenues.
The audit focused on the 2005-06 fiscal year. In that period, the programs examined had total past-due balances of nearly $650 million.
Auditors said eight of the 10 programs need to improve their collection efforts. Collecting about half of those programs’ delinquent balances could bring the state $159.7 million, they said.
To remedy the problem, auditors suggested eight “best practices,” which include more debtor phone calls and letters, as well as legal actions, such as securing liens against a debtor’s property.
Those practices appeared to be effective in at least one instance — the Department of Labor and Industries put them into use while the audit was still under way, and the agency’s collections shot up by 50 percent, to $4.6 million.
Auditors singled out two specific programs for excellent performance: The Department of Revenue’s tax collections and the Employment Security Department’s recovery of benefit overpayments.
The Revenue Department was the only agency examined to have no audit findings suggesting improvement. The five agencies pushed to make improvements were:
Employment Security, for areas other than benefit overpayment.
Labor and Industries
Community, Trade and Economic Development
Ecology
Transportation
State agency leaders responded Tuesday by saying many of the recommendations already have been implemented. They also questioned the ability of some departments to significantly improve their debt collections through the use of recommended best practices alone.
Debtors to the Ecology Department’s toxics cleanup program, for instance, may be “involved in extensive litigation,” while a Community, Trade and Economic Development home loan program must balance collections with its efforts to keep people in their homes.
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