To: Legislative Leadership, Judicial Branch Administrators, Elected Officials, Secretariats, and Department Heads,
Chief Fiscal Officers, and MMARS Liaisons
From: Martin J. Benison, Comptroller
Date: March 28, 2013
Subject: Debt Collection Services – Statewide Contracts
Comptroller Memo FY#2013-19
This memo notifies departments of important information related to use of Debt Collection Services by State Department Billing Entities. Please forward to any staff involved with debt collection activity in your Department.
The Comptroller has broad authority to prescribe accounting rules and instructions for all state Departments and the appropriate use of the state accounting system. Pursuant to G.L. c. 7A, § 7, G.L. c. 7A, § 8, G.L. c. 7A, § 9 and G.L. c. 29, § 31, the Comptroller is required to implement a state accounting system (including a centralized payroll system) and issue instructions for the accounting practices to be used by all Departments for supplies, materials, assets, liabilities, equity, debt, encumbrances, expenditures, revenues, expenses and obligations of all Commonwealth funds and accounts, including payroll, unless specifically exempted by general or special law. The Comptroller has full authority to prescribe, regulate and make changes in the method of keeping and rendering accounts and is authorized to direct state Departments to implement changes in their systems to meet these statewide standards.
Pursuant to G.L. c. 29, s. 29D, the Comptroller is authorized to procure debt collection services on behalf of the Commonwealth for all debts other than state taxes under the Department of Revenue pursuant to M.G.L. c. 14, s. 3A. Unlike most Statewide Contracts procured through OSD under 801 CMR 21:00, which are mandatory only for Executive Departments, the Comptroller is authorized to procure a Statewide Contract that extends to all branches of government and all debt collection activities unless the Department has separate legislative authority to procure debt collection services. Separate general procurement authority for goods or services does NOT automatically extend to debt collection services. This Fiscal Year Memo is being issued to clarify any ambiguity for State Department Eligible Entities that may have procured debt collection services apart from PRF28 or PRF55 for other types of debts, such as federal funds or local funds (Colleges and Universities).
Expired Contract and Contractors - PRF28DesignatedOSC- Debt Collection Statewide Contract
Statewide Contract PRF28DesignatedOSC for debt collection services expired on January 31, 2013 and the following debt collection firms are no longer authorized to accept any “NEW” accounts from the Commonwealth. The following expired contractors may no longer provide debt collection services and must close out all debts by April 1, 2013, for all debts of any kind, including federal funds and local funds.
- NCO Financial Systems, Inc.
- Performant Recovery, Inc. (Diversified Collection Services Inc.)
- Windham Professionals, Inc.
- Pioneer Credit Recovery, Inc.
- Glenn Associates, Inc.
As part of the closeout process for the PRF28 Statewide Contract, these contractors are required to complete the collection on all active debts no later than April 1, 2013. As of April 1, 2013,all debts will be deemed by the Commonwealth to be automatically uncollectible and must be returned to the Eligible Entity (Department).
Any Commonwealth Department collecting Commonwealth debts is required to use the new PRF55DesignatedOSC, irrespective of whether the nature or origin of the debt is state or federal funds or for colleges and universities local funds. The 815 CMR 9.00 updated regulation is in the process of being promulgated and states as follows: “Absent separate statutory authority, no State Department Billing Entity may Intercept payments owed Debtors or enter into a contract for Debt Collection Services except as provided in 815 CMR 9.00.”
There are very few exceptions to the scope of M.G.L. c. 29, s. 29D and 815 CMR 9.00 and CTR will determine application on a case by case basis and work with any State Department Billing Entity to develop a transition plan for engagements to the new Statewide Contract. State Department Billing Entities may not continue contracts or enter into new contracts for debt collection services with any vendor other than the six Contractors approved under the PRF55Designated Statewide Contract. Any contract with a terminated Debt Collection Contractor that was entered into as of January 31st was not authorized and must be closed out by April 1, 2013, as Expired Contractors are no longer authorized to accept any debt from Commonwealth Eligible Entities.
New Statewide Contract Debt Collection Services as of February 1, 2013 – PRF55DesignatedOSC
All State Departments and other Eligible Entities are required to refer all debts as of February 1, 2013 to one of the six firms authorized to accept debts under the new Statewide Contract for Debt Collection Services PRF55DesignatedOSC.
- Allen Daniel Associates, Inc.
- Collecto, Inc. (EOS Collection Company of America)
- Delta Management Associates, Inc.
- Financial Asset Management Systems
- Linebarger Goggan Blair & Sampson, LLP
- Premiere Credit of North America, LLC
The New Statewide Contract aligns Commonwealth debt collection services with industry standards and best practices including:
- accepting electronic payments of debts
- mandating that Statewide Contract Debt Collection Agencies are Payment Card Industry (PCI) compliant in order to receive electronic payments from Debtors
- limiting the time periods for debt collection activity to increase collection turn around and collection efforts
- allowing authorized Statewide Contract Debt Collection Agencies to net fees from collected amounts providing more competitive rates
- mandating access to reporting to ensure accuracy of collections and netted fees
- extending access to Debt Collection Services under the Statewide Contract to any public Billing Entity including any city, town, housing or other authority.
The process to submit debt referrals and fees payments has changed significantly! All debts will now be uploaded from departments through a web portal managed by each authorized Debt Collection Agency. Eligible Entities are required to follow the posted Contract User Guide to begin the implementation process for referring any new debt. All the official documents and Vendor information, pricing, services and implementation contact information are posted on the “Forms and Terms” and “Vendors” web pages on www.comm-pass.com under PRF55DesignatedOSC. We have posted a Job Aid under the Accounts Receivables Job Aids to assist you with locating the Statewide Contract required terms on www.comm-pass.com. This Job Aid is also available under the “Forms and Terms” web tab within Comm-Pass.
Eligible Entities and Debt Collection Contractors are not authorized to sign any contracts, Statements of Work (SOW), contractual terms or other agreements. Specifics of performance terms under each engagement will be documented as part of the implementation process as an attachment or preferably recorded as part of the on-line portal user account settings. Eligible Entities are NOT required to or authorized to sign any additional documentation to engage a Contractor under the Statewide Contract. Eligible Entities and Debt Collection Contractors may not negotiate different terms, practices or procedures than outlined under the Contract User Guide and the Statewide Contract without prior review by CTR. Debt Collection Contractors that allow or implement different practices or performance without authorization are subject to termination from the Statewide Contract.
Departments are encouraged to contact CTR with any questions related to closeout, transition or use of the new Contract. For fastest response, please send an email to the Office of the Comptroller mailbox for the Debt Collection Contract: firstname.lastname@example.org.