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U.S. Department of State

Diplomacy in Action

Debt Management; Payments Management


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DEBT MANAGEMENT

Outstanding debt from non-Federal sources (net of allowances) increased from $42.1 million in 2001 to $45.3 million in 2002. Refer to Notes to the Principal Financial Statements, Note 6, for an analysis of Accounts Receivable balances. Non-Federal receivables consist of debts owed to the International Boundary and Water Commission, and amounts owed for Repatriation Loans, medical costs, travel advances, proceeds from the sale of real property, and other miscellaneous receivables.

Of the delinquent receivables over 365 days old, the majority ($3.8 million) is for the Repatriation Loan Program. These are loans given to destitute American citizens stranded overseas to allow them to return to the United States. The loans are given only if the individual cannot obtain funds from relatives, friends, employers, or another source. The Department acts as the lender of last resort. The loan becomes delinquent 60 days after repatriation to the United States. Due to their poor economic situation, most of these individuals are unable to repay the loans on-time.

The Department uses installment agreements, salary offset, and restrictions on passports as tools to collect its receivables. It also receives collections through its cross-servicing agreement with the Department of the Treasury (Treasury). In 1998, the Department entered into a cross-servicing agreement with the Department of the Treasury for collection of delinquent receivables. In accordance with the agreement and the Debt Collection Improvement Act of 1996 (Public Law 104-134), the Department referred $194,000 to Treasury for cross-servicing in 2002. The decrease in the amount of receivables referred to Treasury for cross- servicing was due to anthrax-related U.S. mail disruptions during the last quarter of 2001. For approximately six months, the impact of these disruptions seriously affected the Department's ability to receive payments and to provide debtors a proper due process notification. Of the current and past debts referred to Treasury, $206,460 was collected in 2002.

Receivables Referred to the Department of the Treasury for Cross-Servicing
 
FY 2002
FY 2001
FY 2000
Number of Accounts
177
677
572
Amounts Referred (In Thousands)
$194
$795
$680

PAYMENTS MANAGEMENT

PROMPT PAYMENT ACT

Timeliness of Payments

The Prompt Payment Act (PPA) requires Federal agencies to pay their bills on time or, an interest penalty must be paid to vendors. The Department continues to show improvement in paying its bills on time.

96% of invoices were paid on time.

2% of invoices required interest penalties.

Timeliness of DOS Payments FY 2000 - FY 2002:
FY 2000 -- 94% (On Time)
FY 2000 -- 6% (Late)
FY 2001 -- 96% (On Time)
FY 2001 -- 4% (Late)
FY 2002 -- 96% (On Time)
FY 2002 -- 4% (Late)

Selected Payment Data

 
2002
2001
2000
Interest Paid ($000)
443
774
1,559
Interest Under $1 Not Due ($000)
4
8
10
Interest Due But Not Paid ($000)
 
 
 
Number of Procurement Card Transactions
Domestic
53,379
47,032
42,016
Overseas
46,297
38,298
22,000

ELECTRONIC PAYMENTS

The Department successfully increased the number and percentage of payments it makes electronically. In 2002, 77% of all payments were made by electronic funds transfer (EFT). Domestically, 96% of payments were made electronically, exceeding the 77% EFT goal that Treasury established for 2002. The Department processed 60% of its 2002 overseas payments by EFT, an 4% increase from 2001.

EFT and Check Payment Volumes

2002
2001
2000
Payment Type
Number
Percent
Number
Percent
Number
Percent
EFT:
Domestic
1,210,054
 
1,137,510
 
1,132,299
Overseas
841,050
 
780,418
 
609,234
EFT Subtotal
2,051,104
77
1,917,928
74
1,741,533
69
Checks:
 
 
 
 
 
Domestic
56,668
 
74,811
 
46,396
Overseas
560,026
 
606,128
 
749,598
Checks Subtotal
616,694
23
680,939
26
795,994
31
Total Payments
2,667,798
100
2,598,867
100
2,537,527
100

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