Non-Tax Delinquent Debt in the Department of Justice
Performed at the Request of the
President's Council on Integrity and Efficiency

Report No. 99-16
May 1999
Office of the Inspector General

The Office of the Inspector General (OIG), Audit Division, completed an audit of the non-tax delinquent debt in the Department of Justice (DOJ). This audit was conducted at the request of the President's Council on Integrity and Efficiency. The Department of Treasury (Treasury) was given the lead on this effort and requested the assistance of the federal Inspectors General to assess how effectively their agencies collect the non-tax delinquent debt amounts and verify the reliability of the accounts receivable balances. The reported amount of DOJ non-tax delinquent debt was $29 million. ¹ This audit was conducted to determine the amount of non-tax delinquent debt that exists and the collectibility of this debt. In addition, the audit assessed the DOJ's debt management activities to ensure that proactive measures are taken to collect the delinquent debt before it is referred to the Treasury for collection.

We obtained and reviewed the Fiscal Year (FY) 1997 DOJ annual financial statement audit reports to serve as a basis in determining the receivables for the DOJ. From the 10 components within DOJ that managed accounts receivable, we selected 3 components that represented about 81 percent of DOJ's receivables -- the Immigration and Naturalization Service (INS), the Bureau of Prisons (BOP), and the Federal Bureau of Investigation (FBI).

We noted that the consolidated annual financial statements prepared by the DOJ, Justice Management Division (JMD), received a disclaimer of opinion from the independent auditors. The independent auditors were unable to ascertain whether certain account balances, including accounts receivable, and disclosures were fairly stated. For the three selected components, the INS received a disclaimer of opinion because the INS did not maintain appropriate accounting records and relevant documentation. However, the BOP and the FBI received qualified opinions with no qualifications related to the accounts receivables. Even though we were unable to attest to the validity of the amount of non?tax delinquent debt in DOJ, we utilized the reports for determining DOJ's receivables for our component selection and testing purposes. Based on our audit of these three components, we found that:

• The number, value, and age of BOP's delinquent receivables reported to Treasury for FY 1997 were inaccurate. The number of delinquent receivables and the net value of the receivables were understated by 14 and $4.2 million, respectively. Also, an additional $4.9 million of delinquent debt was aged improperly.

• The INS' Debt Management Center (DMC) and the Office of General Counsel (OGC) were not able to reconcile the debt status reported in the Debt Collection System (DCOS).

• The FBI collects most debts within 60 days and did not have a significant amount of delinquent user fee receivables during or at the end of FY 1997.

1. According to JMD, the total delinquent debt was $48 million [See Appendix 4]. However, the Treasury's focus was on the delinquent debt over 180 days (standard for referral to Treasury). The $29 million represent DOJ's delinquent debt over 180 days as of September 30, 1997.