Louisiana Developing Office of Debt Recovery Through Private-Public Partnership

Louisiana Secretary of Revenue Tim Barfield told the state Cash Management Review Board Thursday that the state’s new Office of Debt Recovery (ODR) is on schedule to be fully operational within three years. ODR will be an automated, centralized debt collection office that provides collection services for state agencies. It will include a suite of debt collection tools and will work with the Office of the Attorney General and outside collection agencies to perform collection services.

In order to prepare for ODR’s launch, the state is developing a request for proposals for an automated collections system. Deputy Secretary of Revenue Jarrod Coniglio said the RFP should be released by mid-August.

“Today, we’re working with manual processes,” Coniglio said. “The automated system will be fully scalable, and will allow ODR to increase its workload with a minimum of additional human resources.”

Collection tools already in use by ODR include the state tax refund offset from the Louisiana Department of Revenue and a federal vendor payment intercept program that allows ODR to collect final debt from payments owed to companies doing business with the federal government who have exhausted their due process. ODR will also use financial institution data match (FIDM) that allows it to identify and levy final debt payments from the bank accounts of debtors who have exhausted their due process. Already, 82 percent of financial institutions have signed up for participation in the FIDM program, which covers an estimated 90 percent of deposit accounts in the state.

“ODR has already implemented its electronic debt registry, significantly expanded use of an existing collection tool, implemented two new collection tools and has begun collecting debts,” Coniglio added.

The Louisiana Legislature created ODR to assist state agencies in collecting overdue debts determined to be “final debt,” after exhausting all other administrative and legal due processes. ODR will be part of the Louisiana Department of Revenue, and it will use new tools to identify and collect final debt payments on behalf of those agencies.