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U a Comptroller General 203254
of the United States
)Washington, D.C. 20648
B-256184 .3
May 3, 1994
The Honorable Jimmy Hayes
House of Representatives
Dear Mr. Hayes:
This responds to your letter of December 21, 1993, asking
for our assistance concerning the State of Louisiana's
request to renegotiate repayment of the $2.76 million debt
that it owes the United States Department of Labor (Labor)
on account of disallowed Job Training Partnership Act
expenses. We are pleased to report that Labor has agreed to
reopen negotiations and entertain the possibility of
extending the 3-year repayment schedule in an effort to
accommodate the State's financial considerations.
In November 1993, Labor rejected Louisiana's request to
renegotiate based on a misunderstanding of the Federal
Claims Collection Standards (FCCS), 4 C.F.R. ch. II (1992).
The FCCS are government-wide debt collection regulations
issued jointly by GAO and the Department of Justice pursuant
to the Federal Claims Collection Act of 1966, as amended by
the Debt Collection Act of 1982, 31 U.S.C. ch. 37 (1988).
Section 102.11 of the FCCS provides that debts owed to the
United States normally should be paid in full in one lump
sum. Under certain circumstances, however, this section
allows agencies to accept installment payments. In those
cases, the section specifies that [i]f possible, the
installment payments should be sufficient in size and
frequency to liquidate the government's claim in not more
than 3 years. 4 C.F.R. § 102.11(a). Labor believed that
because of section 102.11, it lacked the authority to agree
to installment payment periods longer than 3 years. Labor's
understanding of this provision was influenced, in part, by
previous objections by the Justice Department to repayment
agreements extending beyond 3 years. Based on those
experiences, Labor concluded that Justice construes the FCCS
to preclude agencies from ever entering into repayment
agreements longer than 3 years.
We interpret the plain language of section 102.11 to mean
that agencies should strive to limit the installment
repayment period to 3 years, whenever possible. In our
view, this provision amounts to no more than a strongly
favored goal that an agency may discard when merited under
the facts and circumstances of the particular case, and in
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