DEBT COLLECTION / ACCOUNTS RECEIVABLE RECOVERY PROCEDURES Pacific Area Finance Training February 2008

2 USPS Debts Any postal debts from bargaining and non- bargaining employees MUST be collected in accordance to the regulations outlined in Sections 450 and 460 of the ELM.

3 Purpose To provide an overview of the collection process of any postal debts from bargaining and non-bargaining employees within the Pacific Area.

4 Policy Management is responsible for collecting debts owed the Postal Service by an employee under his or her supervision. ELM and

5 Categories Debts generated by Accounting Service Center (ASC)  Health benefit premiums.  Payroll related debts.  Leave Buy Backs. Statements created by Accounting Service Center (ASC)  Account Receivable (AR) Invoice to Postmaster.  Statement-mailed to employees home address.

6 Categories (Cont.) Locally generated debts  Accountability shortages.  Financial differences. Accounts Receivable established by submitting PS Form 1902 to SIC for local suspense item. Item is cleared with offset to AIC 636. Copy of 1902 should be on file. Creating an Accounts Receivable does not recover funds. PS Form 3239, establishes automatic payments.

7 Collection Procedures Bargaining Employee  Issue a Letter of Demand (LOD). Non-Bargaining Employee  Issue a Letter of Debt Determination (LDD) with employee’s options.

8 Requirements Hand Delivered Letters  Employee signs and dates letter.  Employee keeps original.  Copy maintained in employee’s file. Mailed Letters  Send original letter to employee’s home address.  Certified mail.  Return receipt.  Copy of signed letter and return receipt maintained in employee’s file.

9 Pursue Collection Procedures Bargaining Employees  No grievance filed after 14 calendar days of receipt of LOD – Collect Debt.  Grievance settlement - determines collection must be made.

10 Pursue Collection Procedures (Cont.) Non-Bargaining Employees  If No Dispute Is Received Prior to 15 calendar days from receipt of LDD – Collect debt.  If employee submits a written request for records pertaining to related debt within 10 days after receipt of LDD: Written request must be presented to Management. Management MUST provide records within 5 calendar days.

11 Reconsideration of Debt (Non-Bargaining) Non-Bargaining Employees  If Employee Requests a Reconsideration of Debt: Collection will be delayed. Must be in writing and submitted to Management. Received by USPS NLT 15 calendar days from receipt of LDD. OR within 15 calendar days from receipt of requested records.  Supporting documents must accompany request. USPS decision-within 15 calendar days from receipt of Debt Reconsideration Request.

12 Payment Options - Full Payment Accounts Receivable Debt  Check or money order.  Send payment and copy of invoice to: USPS Disbursing Officer Accounting Service Center 2825 Lone Oak Parkway Eagan MN

13 Payment Options – Salary Offsets Accounts Receivable  Voluntary Salary Offset: Employee Completes -PS Form Send Original form to: Scanning and Imaging Center PO Box 9000 Sioux Falls, SD Keep copy for file. PS Form 3239  Include PRD reference number.

14 Payment Options – Salary Offsets (Cont.) Accounts Receivable  Involuntary Salary Offsets: Notice to employee of Involuntary Administrative Salary Offsets (2 copies) – 30 calendar days prior to involuntary offset. Deduction will begin 30 days after notification.  Include in notification “Hearing under the Debt Collection Act Procedures” (1 copy).

15 Payment Options – Salary Offsets (Cont.) Accounts Receivable  Involuntary Salary Offsets: 1.Management completes PS Form Mail Originals To: Scanning & Imaging Center PO BOX 9000 Sioux Falls, SD Provide copy to employee. 4.Retain a copy on file.

16 Limitations on Amount of Salary Offset Limitations:  Maximum 15% biweekly disposable pay or 20% of gross pay whichever is lower. Greater salary offset if employee agrees in writing. Propose alternative offset schedule:  Imposes severe financial hardship.  USPS decision within 15 calendar days from receipt of proposal.

17 Debt Collection Upon Separation  Not collected from employee at the time of separation.  Discovered within 60 days after separation from service. Action:  Management - notify ASC.  ASC - attempts to recover all outstanding debts from all available sources.

18 Management Responsibilities  Set up a centralized alphabetical filing system for employees’ Accounts Receivable files.  Copies of all supporting documents retained and filed (LOD, LDD, 1902, grievance information, 3239).  Files must be kept in locked cabinet at all times due to sensitive information.  Only authorized employees may have access.  Periodically monitor grievance status.

19 Management Responsibilities  Step 2 grievance is forwarded to Labor Relations for entry to GATS.  Grievance # assigned at Step 2 is annotated in Accounts Receivable file.

20 Accounts Receivable Report “N” Code Under PRD #  Health benefit premium related debt.  Debt type occurs because of late submission or processing of SF 2809, Health Benefits Registration Form or SF 2810, Notice of Change in Health Benefits Enrollment.  Accounts Receivable established by ASC.  Statement of debt sent to installation head.

21 Accounts Report Report “N” Code Under PRD #  Installation head – needs to issue a LDD or LOD.  No automatic deduction set-up.  Installation head responsible for following LOD & LDD process.

22 Accounts Receivable Report NO ACTION REQUIRED BY FIELD ON THE FOLLOWING: “M” and “P” Codes on Accounts Receivable Report  Found under payroll deduction number (PRD #).  Health benefit premium related debt.  ASC Initiates Collection.