a

GAO

United States General Accounting Office

Report to the Honorable Byron L. Dorgan, 

U.S. Senate

March 2004 CRIMINAL DEBT

Actions Still Needed to 

Address Deficiencies 

in Justice’s Collection 

Processes

GAO-04-338
Justice reported an unaudited amount of total outstanding criminal debt of 

about $25 billion as of September 30, 2002, almost double when compared to 

Justice’s unaudited amount from 3 years earlier. This increase, which was 

not unexpected, continued a trend that began in fiscal year 1996. A primary 

factor contributing to the increase is a mandate that requires restitution to 

be assessed regardless of the ability of the offender to pay. As we reported 

in 2001, collections as a percentage of outstanding criminal debt averaged 

about 7 percent for fiscal years 1995 through 1999. As indicated in Justice’s 

unaudited records, because collections decreased slightly while debt 

increased, collections as a percentage of outstanding debt declined to an 

average of about 4 percent for fiscal years 2000, 2001, and 2002. For each of 

these 3 fiscal years, according to Justice’s unaudited records, about twothirds or more of criminal debt was related to white-collar financial fraud. 

Justice has made progress responding to GAO’s 2001 recommendations 

related to criminal debt collection, but not to the degree that had been 

expected. A key recommendation in 2001 was for Justice, the Administrative 

Office of the U.S. Courts, the Office of Management and Budget, and the 

Department of the Treasury to work as a joint task force to develop a 

strategic plan that addresses managing, accounting for, and reporting 

criminal debt. As of mid-December 2003, Justice had not yet worked with 

these other agencies to develop this plan. We also made 13 interim 

recommendations to Justice to help improve the efficiency and 

effectiveness of criminal debt collection while the strategic plan was being 

developed. Since July 2001, Justice has completed action on 7 of these 

recommendations; actions to address 4 of the 7 were completed about 2 

years after GAO made them. Actions to address the remaining 6 interim 

recommendations are in process. 

According to Justice, GAO did not fully recognize its progress in improving 

the criminal debt collection process. GAO said that it had given Justice full 

credit for its efforts to implement the 2001 recommendations, as well as for 

some related efforts outside the scope of those recommendations. GAO 

noted, however, that Justice had not yet led efforts to resolve key 

jurisdictional issues and functional responsibilities. While acknowledging 

that Justice was laying the foundation for improved collections by 

establishing policies and procedures in response to certain of the interim 

recommendations, GAO noted that it is important that the new policies and 

procedures be effectively implemented and that it will likely take some time 

for collection results to be realized from full implementation. 

Until Justice takes action to fully implement these recommendations, 

Justice’s management processes and procedures will not provide adequate 

assurance that offenders are not afforded their ill-gotten gains and that 

innocent victims are compensated for their losses to the fullest extent 

possible.

In July 2001, GAO reported that 

outstanding criminal debt, as 

reported in Department of Justice 

(Justice) statistical reports, had 

increased from about $6 billion as 

of September 30, 1995, to more 

than $13 billion as of September 30, 

1999. Although some of the key 

factors that contributed to this 

increase were beyond Justice’s 

control, GAO concluded—after 

accounting for such factors—that 

Justice’s criminal debt collection 

processes were inadequate. 

Accordingly, in the 2001 report, 

GAO made 14 recommendations to 

Justice to improve the 

effectiveness and efficiency of its 

criminal debt collection processes.

To follow up on the 2001 report, 

GAO was asked to (1) provide 

information on the amount and 

growth of criminal debt for fiscal 

years 2000 through 2002, 

(2) examine the extent to which 

Justice has acted on GAO’s 

previous recommendations, and 

(3) review Justice’s collection 

efforts for selected criminal debt 

cases related to white-collar 

financial fraud. This report 

addresses the first two objectives; 

GAO will report separately on its 

ongoing work to address the third. 

While GAO is not making any new 

recommendations in this report, it 

reaffirms those made in 2001 for 

which actions have not been 

completed. 

www.gao.gov/cgi-bin/getrpt?GAO-04-338.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gary T. Engel 

at (202) 512-3406 or engelg@gao.gov. 

Highlights of GAO-04-338, a report to the 

Honorable Byron L. Dorgan, U.S. Senate 

March 2004 

CRIMINAL DEBT

Actions Still Needed to Address 

Deficiencies in Justice’s Collection 

Processes 
Page i GAO-04-338 Justice’s Criminal Debt Collection Processes

Contents

Letter 1

Results in Brief 2

Background 4

Scope and Methodology 5

Criminal Debt Has Increased Markedly, but Collections Have 

Decreased Slightly 6

Prompt Action Has Not Been Taken to Address the Majority of 

Recommendations 10

Conclusion 20

Agency Comments and Our Evaluation 21

Appendix

Appendix I: Comments from the Department of Justice’s Executive 

Office for United States Attorneys 24

GAO’s Comments 28

Table Table 1: Status of Recommendations from the July 2001 Criminal 

Debt Report 15

Figures Figure 1: Criminal Debt Outstanding and Collected for Fiscal Years 

Ended September 30, 1995, through September 30, 2002 8

Figure 2: Justice’s Total Criminal Debt and White-Collar Financial 

Fraud Debt Outstanding as of September 30, 2000, 2001, 

and 2002 9

Figure 3: White-Collar Financial Fraud Debt Outstanding and 

Collected for Fiscal Years Ended September 30, 2000 

through 2002 10

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Page 1 GAO-04-338 Justice’s Criminal Debt Collection Processes

United States General Accounting Office

Washington, D.C. 20548

A

March 5, 2004 Letr

The Honorable Byron L. Dorgan

United States Senate

Dear Senator Dorgan:

In July 2001, we reported that the Department of Justice (Justice) and 

certain other federal agencies needed to take a number of actions to 

improve the federal government’s criminal debt collection efforts.1

 We 

reported that outstanding criminal debt, as reported in Justice’s U.S. 

Attorneys’ statistical reports,2

 had increased from about $6 billion as of 

September 30, 1995, to over $13 billion as of September 30, 1999. We noted 

that four key factors, some of which were beyond Justice’s or probation 

offices’ control, contributed to the significant growth in the amount of 

reported uncollected criminal debt: (1) the nature of the debt, in that it 

involves criminals who may be incarcerated or have been deported or who 

have minimal earning capacity; (2) the assessment of mandatory restitution 

regardless of ability to pay as required by the Mandatory Victims 

Restitution Act of 1996 (MVRA);3

 (3) interpretation by Justice’s Financial 

Litigation Units (FLU) of payment schedules set by judges which limit 

collection activities; and (4) state laws that may limit the type of property 

that can be seized and the amount of wages that can be garnished.

However, we also pointed out Justice could do more to improve the 

collection of criminal debt. We noted as contributing factors to the growth 

of reported uncollected criminal debt Justice’s inadequate policies and 

procedures for collecting criminal debt, lack of adherence to established 

1

U.S. General Accounting Office, Criminal Debt: Oversight and Actions Needed to Address 

Deficiencies in Collection Processes, GAO-01-664 (Washington, D.C.: July 16, 2001). The 

report covered the debt collection processes of the U.S. Courts, including the 

Administrative Office of the U.S. Courts and selected probation offices, as well as Justice. In 

addition, it covered the criminal debt oversight roles of the Office of Management and 

Budget and the Department of the Treasury.

2

These statistical reports, which are published annually, are unaudited.

3

Courts are required by 18 U.S.C. § 3663A (2000) to order restitution when sentencing 

offenders convicted of (1) a crime of violence as defined by 18 U.S.C. § 16 (2000); (2) an 

offense against property under title 18 of the U.S.C. including any offense committed by 

fraud or deceit; or (3) an offense related to tampering with consumer products, 18 U.S.C. § 

1365 (2000), in which an identifiable victim has suffered a physical injury or pecuniary loss. 

See also 18 U.S.C. §§ 2248, 2259, 2264, and 2327 (2000).
Page 2 GAO-04-338 Justice’s Criminal Debt Collection Processes

criminal debt collection procedures at certain Justice districts, and 

Justice’s insufficient coordination with other entities involved in the 

collection of criminal debt. After taking into account the factors that were 

not controllable, we concluded that Justice’s management processes and 

procedures did not provide assurance that offenders were not afforded 

their ill-gotten gains and that innocent victims would be compensated for 

their losses to the fullest extent possible. We observed that until top 

management at Justice and the U.S. Courts placed a higher priority on 

ensuring that the entities involved in the criminal debt collection process 

more effectively and efficiently pursued collection efforts, the assessment 

of criminal fines and restitution as an effective punitive tool would be 

jeopardized, and valuable, limited resources would continue to be wasted 

on duplicative efforts. Accordingly, we made 14 recommendations to 

Justice and several to the Administrative Office of the U.S. Courts (AOUSC) 

to improve the effectiveness and efficiency of the federal government’s 

criminal debt collection processes.

In your request letter and our subsequent discussions with your office, you 

asked us to (1) provide detailed information on the amount and growth of 

criminal debt for fiscal years 2000 through 2002, including specific amounts 

related to white-collar financial fraud; (2) examine the extent to which 

Justice has acted on our previous recommendations to it to improve 

criminal debt collection; and (3) review Justice’s collection efforts for 

selected criminal debt cases related to white-collar financial fraud. This 

report addresses the first two objectives. We will report separately on the 

results of our ongoing work, which addresses the third objective.

Results in Brief Justice reported an unaudited amount of total outstanding criminal debt of 

about $25 billion as of September 30, 2002, almost double when compared 

to Justice’s unaudited amount from 3 years earlier.4

 This increase, which 

was not unexpected, continued a significant upward trend that started in 

fiscal year 1996, the year MVRA was enacted. According to Justice officials, 

nonfederal restitution stemming from MVRA’s mandatory restitution 

requirements was the major component of criminal debt outstanding as of 

September 30, 2000, 2001, and 2002. Justice’s unaudited records showed 

that nonfederal restitution accounted for about 70 percent of total reported 

4

The latest reported data from Justice as of the completion date of our fieldwork in midDecember 2003 were for fiscal year 2002. Justice was still in the process of compiling and 

summarizing criminal debt information for fiscal year 2003. 
Page 3 GAO-04-338 Justice’s Criminal Debt Collection Processes

criminal debt as of September 30, 2002. As we reported in 2001, the rate of 

criminal debt collection averaged about 7 percent for fiscal years 1995 

through 1999. Due to a significant increase in debt and a slight decrease in 

collections as indicated in Justice’s unaudited records, this rate decreased 

to an average of about 4 percent for fiscal years 2000, 2001, and 2002. For 

each of these more recent 3 fiscal years, according to Justice’s unaudited 

records, about two-thirds or more of criminal debt was related to whitecollar financial fraud.

Justice has made progress in responding to our recommendations, but not 

to the degree we would have anticipated. As we reported in 2001, building 

and sustaining the capacity to address the long-standing problems in 

collecting outstanding criminal debt—including overcoming fragmented 

processes and lack of coordination—will require a united strategy among 

the entities involved. Therefore, we recommended that Justice, AOUSC, the 

Office of Management and Budget (OMB), and the Department of the 

Treasury (Treasury) work together in the form of a joint task force to 

develop a strategic plan that addresses managing, accounting for, and 

reporting criminal debt. As we recommended, this strategy should include 

(1) determining the collectibility of outstanding criminal debt amounts so 

that a meaningful allowance for uncollectible debt can be reported and 

used for measuring debt collection performance and (2) ensuring that 

relevant criminal debt information is reported and/or disclosed in 

applicable executive branch agencies’ financial statements and subjecting 

such information to audit. We previously noted that proper accounting for, 

reporting, and managing of criminal debt would heighten management 

awareness and ultimately result in a more effective collection process. 

However, as of the completion of our follow-up fieldwork in mid-December 

2003, Justice had not yet worked with these other agencies to develop the 

strategic plan, which was a key recommendation. We also made 13 interim 

recommendations to Justice to stem the growth of reported uncollected 

criminal debt while Justice and other agencies worked to develop the 

strategic plan. Since July 2001, Justice has completed action on 7 of the 

interim recommendations. Actions to address 4 of these 7 

recommendations were completed about 2 years after we made them; 

actions to address the remaining 6 are still in process. 

Justice’s own criminal debt information, which shows that debt has 

increased markedly while collections have decreased slightly, strongly 

supports the need for prompt and decisive management action to ensure 

full implementation of our prior recommendations. Until such action is 

taken, including forming a joint task force with AOUSC, OMB, and Treasury 
Page 4 GAO-04-338 Justice’s Criminal Debt Collection Processes

and developing the strategic plan, the effectiveness of criminal fines and 

restitution as a punitive tool may be diminished, and Justice’s management 

processes and procedures will not provide adequate assurance that 

offenders are not afforded their ill-gotten gains and innocent victims are 

compensated for their losses to the fullest extent possible.

Justice stated that we had not fully reflected its efforts to improve the 

criminal debt collection process. As discussed in the “Agency Comments 

and Our Evaluation” section at the end of this report and in the more 

detailed analysis in appendix I following our reprinting of Justice’s 

comments, we believe that the report accurately depicts Justice’s efforts to 

respond to the recommendations made in our July 2001 report to improve 

criminal debt collection. 

Background Justice is responsible for collecting criminal debt and has delegated 

operating responsibility to its FLUs within all of Justice’s U.S. Attorneys’ 

Offices (USAO).5

 Justice’s Executive Office for United States Attorneys 

(EOUSA) provides administrative and operational support, including 

support required for debt collection, to the USAOs. The criminal debt 

collection process typically begins when an offender is convicted and a 

judge orders the offender to pay a fine or restitution. In addition to Justice, 

the U.S. Courts and their probation offices may assist in collecting monies 

owed. AOUSC provides national standards and promulgates administrative 

and management guidance, including standards and guidance required for 

debt collection, to the various U.S. judicial districts. The courts typically 

receive payments of fines and deposit them in the Crime Victims Fund.6

Both the courts and certain FLUs receive restitution payments, which are 

disbursed to the applicable victims or entities as directed by the courts.

5

There are 94 districts throughout the country, but USAOs for 2 of them are combined, 

resulting in 93 USAOs.

6

Criminal fine payments are required by 42 U.S.C. § 10601 (2000) to be deposited in the 

Crime Victims Fund except for payments for fines related to the Endangered Species Act, 

Lacey Act Amendments of 1981, Railroad Unemployment Insurance Act, Federal Water 

Pollution Control Act, Postal Service Fund, and county public schools.
Page 5 GAO-04-338 Justice’s Criminal Debt Collection Processes

In our 2001 report, we noted that collection of outstanding criminal debt 

was a long-standing problem, with many of the problems cited similar to 

problems that we reported on back in 1985.7

 Aside from the question of 

whether those convicted had earnings or assets with which to pay fines or 

restitution, a number of other factors make collection difficult. These 

factors, listed below, remain applicable today:

• Criminals may not be willing to comply with the law. Forcing 

compliance is difficult because criminals are already convicted 

offenders who may be serving time in prison or may have been 

deported.

• Imprisoned offenders have limited earning capacity, making potential 

collections limited.

• A significant amount of time may pass between offenders’ arrest and 

sentencing, thus affording opportunities for offenders to hide 

fraudulently obtained assets in offshore accounts, shell corporations, 

family members’ names and accounts, or other ways.

• MVRA requires that assessment of restitution be based on actual loss 

and not on an offender’s ability to pay. Therefore, depending on the 

nature of the crime, collection of the total restitution assessed may be 

unrealistic from the outset.

• According to 18 U.S.C. section 3613 (2000), most criminal debts must 

remain on the books for 20 years plus the period of the offender’s 

incarceration and cannot be “written off” prior to the expiration of those 

periods unless the debtor is deceased or the court approves a petition of 

remission filed by USAO. Even if Justice determines that certain 

criminal debts, or a large percentage of them, are not collectible, these 

debts must remain on the books.

Scope and 

Methodology

To provide detailed information on the amount and growth of criminal 

debt, including specific amounts related to white-collar financial fraud, we 

obtained information from Justice on the amount of (1) outstanding 

criminal debt as of the end of fiscal years 2000, 2001, and 2002 and 

7

U.S. General Accounting Office, After the Criminal Fine Enforcement Act of 1984—Some 

Issues Still Need to Be Resolved, GAO/GGD-86-2 (Washington, D.C.: Oct. 10, 1985).
Page 6 GAO-04-338 Justice’s Criminal Debt Collection Processes

(2) related collections for each of these 3 fiscal years. This information has 

not been audited. However, we reviewed the trends in the amounts and 

growth of overall criminal debt for these fiscal years. Specifically, we 

analyzed trends in major components of the debt and reasons for the 

changes and compared them to similar trends that we had assessed and 

discussed in our 2001 report. We also discussed the trends with appropriate 

Justice officials and compared overall criminal debt information provided 

by those officials to information in existing published Justice reports, when 

available. We worked with Justice officials to identify the criminal debt 

categories in Justice’s information systems that Justice considers to be 

white-collar financial fraud.

We obtained an understanding of the key automated information systems 

Justice uses to track criminal debt amounts and related collections through 

discussions with Justice officials and review of pertinent documents that 

describe the systems. We also discussed with Justice officials and obtained 

appropriate documentation supporting reliability testing performed by 

Justice on these systems. 

To evaluate actions Justice has taken to implement our previous 

recommendations, we obtained and reviewed pertinent Justice documents, 

including correspondence to certain congressional committees related to 

our 2001 report, relevant memorandums, summaries of work performed, 

proposed actions, revised policy and procedures manuals, and other 

related materials and correspondence. We discussed the documents 

provided by Justice and the status of implementation of each of the 

recommendations with an appropriate Justice official.

We conducted our review from March 2003 through mid-December 2003 in 

accordance with U.S. generally accepted government auditing standards. 

We requested written comments on a draft of this report from the Attorney 

General or his designated representative. Justice’s letter is reprinted in 

appendix I.

Criminal Debt Has 

Increased Markedly, 

but Collections Have 

Decreased Slightly

Justice reported an unaudited amount of total outstanding criminal debt of 

about $25 billion as of September 30, 2002, almost double when compared 

to Justice’s unaudited amount from 3 years earlier. This marked increase 

over the 3-year period continued a significant upward trend that started in 

fiscal year 1996, the year MVRA was enacted. Given MVRA’s requirement 

that restitution be assessed regardless of the criminal’s ability to pay, the 
Page 7 GAO-04-338 Justice’s Criminal Debt Collection Processes

significant increase in the balance of reported uncollected criminal debt 

was not unexpected. According to Justice’s unaudited records, collections 

relative to outstanding criminal debt averaged about 7 percent for fiscal 

years 1995 through 1999 and decreased to an average of about 4 percent for 

fiscal years 2000, 2001, and 2002. For each of these latter 3 fiscal years, 

according to Justice’s unaudited records, about two-thirds or more of the 

criminal debt was related to white-collar financial fraud. 

As shown in figure 1, Justice’s reported criminal debt outstanding totaled 

approximately $16 billion, $20 billion, and $25 billion as of September 30, 

2000, 2001, and 2002, respectively. Criminal debt owed consists primarily of 

fines and federal and nonfederal restitution8

 related to a wide range of 

criminal activities, including domestic and international terrorism, 

organized drug trafficking, firearms crimes, and white-collar financial 

fraud. According to Justice officials, nonfederal restitution stemming from 

MVRA’s mandatory restitution requirements was the major component of 

criminal debt outstanding as of September 30, 2000, 2001, and 2002. 

Justice’s unaudited records showed that nonfederal restitution accounted 

for about 70 percent of total reported criminal debt as of September 30, 

2002. This proportion is generally consistent with what we found for fiscal 

year 1999, which we reported in our 2001 report. At that time, about 66 

percent of outstanding criminal debt as of September 30, 1999, was 

nonfederal restitution debt. 

According to Justice’s unaudited records, collections of outstanding debt 

did not increase, and in fact fell slightly, over this 3-year period. As shown 

in figure 1, collections for fiscal years 2000, 2001, and 2002, totaled about

$1 billion, $800 million, and $800 million, respectively, or an average of 

about 4 percent of outstanding debt for the 3 years. In our 2001 report, we 

reported that criminal debt collection averaged about 7 percent for fiscal 

years 1995 through 1999.

8

Nonfederal restitution is criminal debt owed to victims of crime other than the federal 

government, for which Justice has collection responsibility.
Page 8 GAO-04-338 Justice’s Criminal Debt Collection Processes

Figure 1: Criminal Debt Outstanding and Collected for Fiscal Years Ended 

September 30, 1995, through September 30, 2002

Note: EOUSA data used for this figure are unaudited.

As shown in figure 2, a major component of criminal debt was debt related 

to white-collar financial fraud, which, according to Justice’s unaudited 

records, totaled about $11 billion, $13 billion, and $17 billion as of 

September 30, 2000, 2001, and 2002, respectively, or about two-thirds or 

more of overall outstanding criminal debt at the end of each of these years. 

White-collar financial fraud debts included fines and restitution related to 

fraud against business institutions, antitrust violations, bank fraud and 

embezzlement, bankruptcy fraud, computer fraud, consumer fraud, federal 

procurement fraud, federal program fraud, health care fraud, insurance 

fraud, and tax fraud. Also included were debts related to corporate 

financial fraud, which, as of the date of completion of our fieldwork, 

consisted of fines and restitution related to advance fee schemes,9

commodities fraud, securities fraud, and other investment fraud. According 

to Justice’s unaudited records, as was the case for criminal debt overall, the 

major component of white-collar financial fraud debt for each of the 3 

fiscal years was nonfederal restitution, which accounted for about 80 

percent of the white-collar financial fraud debt as of September 30, 2002.

9

Advance fee schemes involve fraud against businesses or individuals involving the payment 

of a fee in advance for goods, services, or other things of value.

Dollars in billions

0

5

10

15

20

25

30

1995 1996 1997 1998 1999 2000 2001 2002

Outstanding balance as of September 30

Collected for the fiscal year ended September 30

Source: EOUSA.

16

20

25

1 0.8 0.8
Page 9 GAO-04-338 Justice’s Criminal Debt Collection Processes

Figure 2: Justice’s Total Criminal Debt and White-Collar Financial Fraud Debt 

Outstanding as of September 30, 2000, 2001, and 2002

Note: EOUSA data used for this figure are unaudited.

As shown in figure 3, according to Justice’s unaudited records, collections 

of debt related to white-collar financial fraud, while increasing, have 

remained low when compared to total white-collar financial fraud debt 

outstanding. Such collections totaled about $300 million, $400 million, and 

$600 million for fiscal years 2000, 2001, and 2002, respectively.

16

20

13

25

17

11

2000 2001 2002

Total criminal debt 

Total white-collar financial fraud debt

Dollars in billions

0

5

10

15

20

25

Source: EOUSA.
Page 10 GAO-04-338 Justice’s Criminal Debt Collection Processes

Figure 3: White-Collar Financial Fraud Debt Outstanding and Collected for Fiscal 

Years Ended September 30, 2000 through 2002

Note: EOUSA data used for this figure are unaudited.

Prompt Action Has Not 

Been Taken to Address 

the Majority of 

Recommendations

Justice has not taken timely action to address all of the recommendations 

we made to it in July 2001, which were designed to improve the 

effectiveness and efficiency of Justice’s criminal debt collection processes. 

Specifically, Justice has not taken action along with certain other agencies 

to develop a strategic plan for criminal debt collection, which was a key 

recommendation. In addition, since July 2001, Justice has completed action 

on only 7 of the 13 interim recommendations that were made to stem the 

growth of reported uncollected criminal debt while Justice and certain 

other agencies worked to develop the strategic plan. Actions to address 4 

of these 7 recommendations were completed about 2 years after we made 

the recommendations, and actions to address the remaining 6 interim 

recommendations are still in process. One indication of Justice’s level of 

resolve to expeditiously improve collection success is the timeliness of a 

required response to the Congress. Heads of federal agencies are required 

to submit a written statement within an established time frame to certain

17

13

11

0.6 0.3 0.4

0

2

4

6

8

10

12

14

16

18

Outstanding white-collar financial fraud debt balance as of September 30

Collected white-collar financial fraud debt for the fiscal year ended September 30

Source: EOUSA.

Dollars in billions

2000 2001 2002

Fiscal years
Page 11 GAO-04-338 Justice’s Criminal Debt Collection Processes

congressional committees on actions taken in response to 

recommendations we make in a report.10 Justice did not submit its 

statement until 2 years after the date of our report, after we had made 

inquiries about the status of the statement and Justice’s progress in 

implementing our recommendations.

Justice Has Not Developed a 

Strategic Plan with Certain 

Other Agencies

In our 2001 report, we emphasized that addressing the long-standing 

problems in the collection of outstanding criminal debt required a united 

strategy among the entities involved with the collection process. In 

addition to identifying a need to work closely with the U.S. Courts to 

coordinate criminal debt collection efforts, we stated that leveraging 

OMB’s and Treasury’s current central agency roles could result in effective 

oversight of the collection of criminal debt. For example, a primary 

function of OMB as a central agency is to evaluate the performance of 

executive branch programs and serve as a catalyst for improving 

interagency cooperation and coordination. In its central role, OMB is also 

responsible for reviewing debt collection policies and activities. We also 

noted that Treasury has a central agency role in implementing certain 

provisions of the Debt Collection Improvement Act of 1996, which would 

allow it to help Justice identify the types of delinquent criminal debt that 

would be eligible for reporting and referral to Treasury’s offset program 

(TOP).11

To promote a united approach to collecting outstanding criminal debt, we 

recommended that the Attorney General work with the Director of AOUSC, 

the Director of OMB, and the Secretary of the Treasury in the form of a 

joint task force to develop a strategic plan to improve criminal debt 

collection processes and establish an effective coordination mechanism 

10When the Comptroller General issues a report that includes a recommendation to the head 

of an agency, 31 U.S.C. § 720(b) (2000), requires the head of an agency to submit a written 

statement on action taken on the recommendation. The statement is required to be 

submitted to the Committee on Governmental Affairs of the Senate and the Committee on 

Government Reform of the House of Representatives before the 61st day after the date of 

the report and to the Committees on Appropriations of both houses of the Congress in the 

agency’s first request for appropriations submitted more than 60 days after the date of the 

report.

11TOP is a governmentwide delinquent debt matching and payment offset system. TOP 

offsets federal payments such as tax refunds, vendor and miscellaneous payments, and 

federal retirement payments against federal nontax debts, states' child support debts, and 

certain states' tax debts.
Page 12 GAO-04-338 Justice’s Criminal Debt Collection Processes

among all entities involved in these processes. We stated that the strategy 

should address managing, accounting for, and reporting criminal debt. We 

also stated that the strategy should include (1) determining an approach for 

assessing the collectibility of outstanding amounts so that a meaningful 

allowance for uncollectible criminal debts can be reported and used for 

measuring debt collection performance and (2) having OMB work with 

Justice and certain other executive branch agencies to ensure that these 

entities report and/or disclose relevant criminal debt information in their 

financial statements and subject such information to audit.

It is important to reemphasize the need for assessing the collectibility of 

outstanding criminal debt amounts and establishing and reporting a 

meaningful allowance for uncollectible debts.12 According to Justice, about 

74 percent or more of reported criminal debt amounts in its records for 

fiscal years 2000, 2001, and 2002 were in suspense, meaning that no 

collection action was being taken on the debt because it had been 

determined that reasonable efforts to collect were unlikely to be effective. 

However, we emphasized in our 2001 report that Justice had not performed 

an analysis of its criminal debt to estimate how much of the outstanding 

amounts was uncollectible and had not established an allowance for 

uncollectible debt for amounts that were due to the federal government. 

We specifically noted that since the collectibility of outstanding criminal 

debt had not been assessed, the amount in suspense did not represent a 

reliable estimate of the amount that was expected to be uncollected. We 

also discussed the importance of subjecting criminal debt amounts to 

independent audit, which would include assessments of internal controls 

and compliance with applicable laws and regulations related to the 

criminal debt process. Further, we noted that proper accounting for, 

reporting, and managing of criminal debt would heighten management 

awareness and ultimately result in a more effective collection process. 

12According to Statement of Federal Financial Accounting Standards (SFFAS) No. 1, 

Accounting for Selected Assets and Liabilities, and SFFAS No. 7, Accounting for Revenue 

and Other Financing Sources and Concepts for Reconciling Budgetary and Financial 

Accounting, a receivable should be recognized once amounts that are due to the federal 

government are assessed, net of an allowance for uncollectible amounts. Also, OMB 

Circular No. A-129 (revised, November 2000), Policies for Federal Credit Programs and 

Non-Tax Receivables, requires agencies to provide accounting and management 

information for effective stewardship, including resources entrusted to the government 

(e.g., for nonfederal and federal restitution).
Page 13 GAO-04-338 Justice’s Criminal Debt Collection Processes

As of the completion date of our fieldwork, Justice had not begun to 

develop, in conjunction with AOUSC, OMB, and Treasury, a written 

strategic plan for collection of outstanding criminal debt. In December 

2001, Justice’s EOUSA sent letters to AOUSC, OMB, and Treasury citing our 

2001 report on criminal debt collection and our recommendation to form a 

joint task force to develop a strategic plan to improve criminal debt 

collection and establish effective coordination between each of the 

involved entities. According to a Justice official, the purpose of the letters 

was to solicit representatives from each of the agencies to assist in this 

effort. However, this initial attempt to form the joint task force was 

unsuccessful. The official stated that on account of our recent inquiries 

about this recommendation, EOUSA plans to make another attempt to 

contact appropriate officials at the other agencies. The Justice official also 

stated that both EOUSA and AOUSC have to address certain internal 

deficiencies, including systems problems, before they can effectively 

develop a strategic plan.13

As previously mentioned and discussed in more detail in our 2001 report, 

addressing the long-standing problems in the collection of outstanding 

criminal debt—including fragmented processes and lack of coordination—

will require a united strategy among the entities involved with the 

collection process. The participation and cooperation of each of these 

entities, including AOUSC, OMB, and Treasury, are critical to the formation 

of the joint task force and development of a strategic plan, as 

recommended. Justice cannot require these agencies to participate in the 

joint task force and development of the strategic plan. However, Justice is a 

key federal agency responsible for the collection of criminal debt and, as 

such, is accountable for enlisting all affected agencies’ support in a 

sustained effort to develop a strategic plan and cohesive approach for 

managing, accounting for, reporting, and improving the collection of such 

debt.

13EOUSA meets regularly with AOUSC, and the goal of these meetings is to improve criminal 

debt collection and establish effective coordination for the debt collection process.
Page 14 GAO-04-338 Justice’s Criminal Debt Collection Processes

It is important to note that Justice has begun to get criminal debts into TOP. 

According to a Justice official, during the first part of fiscal year 2003, 

Justice piloted the TOP process for criminal debts in four districts, 

resulting in inclusion of about $700,000 of criminal debts in TOP by the end 

of fiscal year 2003. This official told us that with the progress of the pilot 

program, the debt referral program was expanded in August 2003 to all 

eligible FLUs.14 According to the official, as of December 5, 2003, 20 of the 

43 districts eligible to submit criminal debts to TOP had either added 

criminal debts to TOP or were in the process of identifying criminal debts 

and sending out 60-day notices to debtors demanding payment, which is 

necessary before a debt can be sent to TOP.15 As of December 3, 2003, FLUs 

had submitted 549 criminal debts, with a total outstanding balance of 

approximately $1.4 million, to TOP, and Justice anticipates many more 

debts will be included in TOP in the next few months. Given that TOP has 

resulted in over $1 billion in nontax debt collections from payment offsets 

governmentwide during each of fiscal years 2000, 2001, and 2002, it will be 

important for Justice to continue to emphasize submitting debts to TOP as 

an integral part of its criminal debt collection efforts, as such action could 

increase potential collections. 

Actions to Address Certain 

of Our Interim 

Recommendations Have 

Been Taken Recently or Are 

in Process

We recognized at the time of our 2001 report that the development of a 

strategic debt collection plan with other agencies that have a key role to 

play in criminal debt collection would take time. Therefore, to help 

improve collections and stem the growth in reported uncollected criminal 

debt while Justice worked with other agencies to establish the task force 

and develop the strategic plan for criminal debt collection, we made 13 

recommendations for interim action to the Attorney General. As shown in 

table 1, Justice has completed action on 7 of these recommendations. Four 

of the 7 recommendations, however, were not completed until about 2 

years after we made them. Actions to address the 6 remaining 

recommendations are still in process. Since the interim recommendations 

largely focused on policies and procedures, it will be important that they be 

effectively implemented once they are established. 

14To be eligible for the program, the clerk’s office in that district must meet certain criteria 

established by AOUSC, including that the clerk’s office must (1) agree to participate in 

including criminal debts in TOP and (2) use a specific automated accounting system.

15This 60-day notice informs the debtor of the FLU’s intent to submit the debt to Treasury for 

offset purposes.
Page 15 GAO-04-338 Justice’s Criminal Debt Collection Processes

Table 1: Status of Recommendations from the July 2001 Criminal Debt Report

Source: EOUSA.

The status of each of our 13 interim recommendations is discussed below. 

Recommendations for which corrective actions have been completed are 

discussed first. 

Status

Recommendations Date completed In process

The Attorney General should

1. Work together with the Director of AOUSC to (1) reduce duplication of data entry for collections 

and disbursements, (2) require FLUs and the courts to periodically reconcile payment data 

recorded in their separate tracking systems, and (3) revise district guidance so that FLUs can 

take a more proactive role in monitoring collection efforts of probation offices.

X

2. Establish policies and procedures that require Justice investigating case agents and prosecuting 

attorneys to share relevant financial information with FLUs within an established time frame after 

an offender is sentenced

May 2003

3. Require FLUs to document correspondence with case agents and prosecuting attorneys in the 

FLU files, including whether and why efforts were not coordinated

X

4. Require FLUs to use collectibility analyses to prioritize criminal debt collection efforts on debt 

types deemed through historical experience to be more collectible

Sept. 2003

5. Reinforce current policies and procedures for entering cases into criminal debt tracking systems; 

filing liens; issuing demand letters, delinquent notices, and default notices; performing asset 

discovery work; using other enforcement techniques; and using event codes, including suspense 

codes

Prior to FY 2003

6. Revise current policies for issuing demand letters, specifying when a demand letter should be 

sent and within what time frames

May 2003

7. Require FLUs to establish time frames for procedures related to criminal debt collection activities 

that do not currently have established time frames

May 2003

8. Require FLUs to document in their files instances where asset discovery work was not performed 

and why it was not performed

X

9. Establish a policy for the FLUs to date stamp when judgments in a criminal case are received X

10. Revise interest and penalty policies so that interest and penalties are consistently assessed and 

reported

X

11. Adequately measure criminal debt collection performance against established goals Prior to FY 2003

12. Revise the FLUs' databases to (1) capture needed information such as terms of fine and 

restitution order, status of offender (expected release date from prison or probation) and (2) allow 

FLUs to allocate outstanding amounts between amounts likely to be collected and those that are 

not likely to be collected

X

13. Perform an analysis to assess whether the FLUs’ human capital resources and training are 

adequate to effectively perform their collection activities

Prior to FY 2003
Page 16 GAO-04-338 Justice’s Criminal Debt Collection Processes

Policies and Procedures for 

Sharing Relevant Financial 

Information

In May 2003, Justice’s EOUSA took action to address recommendation 2 by 

issuing the Prosecutor’s Guide to Criminal Monetary Penalties. The guide 

contains information on the obligations and responsibilities of criminal 

prosecutors and others involved in the criminal debt collection process to 

increase the likelihood that victims of crime are compensated for their 

losses. EOUSA has provided the guide to all entities involved in the 

collection of criminal debt at Justice, including prosecuting attorneys, 

investigating case agents, and FLU staff. The guide is also available on 

Justice’s intranet.

This guide requires prosecutors to ensure that the responsible FLU 

receives all available information on a defendant’s financial resources by 

(1) forwarding a copy of the presentence report to the FLU; (2) providing 

the FLU with any information or pleading in the government’s file on a 

defendant’s financial resources not obtained through the grand jury 

investigation; (3) filing a motion asking the court to order disclosure to the 

FLU of any information gathered by the grand jury, and to make the 

disclosure as soon as it is ordered; and (4) ordering the transcript of any 

hearing in which a defendant’s financial resources were discussed, such as 

a bond hearing, and forwarding the transcript to the FLU. According to a 

Justice official, case agents work directly with the prosecuting attorneys 

and share any information, including financial information, with the 

prosecutors before a judgment on a case is issued. The Justice official 

noted that once a judgment in a criminal case is issued, it generally is sent 

from the courts to the criminal prosecutor within 1 week, and once the 

prosecutor receives the judgment, the financial information is shared with 

the responsible FLU.

Use of Collectibility Analysis to 

Prioritize Criminal Debt 

Collection Efforts

In September 2003, EOUSA completed actions to address recommendation 

4 by issuing a memorandum to all Financial Litigation Supervisors and 

FLUs requiring that each FLU establish policies and procedures to ensure 

that all FLU cases are effectively prioritized and enforced pursuant to a 

priority system. The memorandum contained guidance, including factors to 

consider in assigning priority codes (e.g., the debtor’s assets and income, 

type of debtor, type of debt, type of victim, complexity of the case); default 

priority codes based on the amount of the debt; information on setting 

review dates; and implementation procedures, including a list of fields and 

codes to be used in Justice’s new system for tracking debts, and milestone 

dates for completion of the review and prioritization of all existing cases. 

According to a Justice official, the guidance for establishing a priority 

system is fairly general to allow each district to set its own priorities based 

on the type of debt typically collected at that district. According to the 
Page 17 GAO-04-338 Justice’s Criminal Debt Collection Processes

memorandum, effective October 1, 2003, all new judgments should be 

prioritized using the priority system; by December 31, 2003, FLUs should 

review all pre-existing judgments with an original debt balance of 

$1 million or more; by March 31, 2004, FLUs should review all pre-existing 

judgments with an original debt balance of $100,000 to $999,999; and by 

December 31, 2004, to the extent resources permit, FLUs should review all 

remaining pre-existing judgments. Although priority-setting is currently a 

manual process, once Justice’s new system has been updated, which 

according to the Justice official is scheduled for May 2004, the priority 

codes will be incorporated into the new automated priority process.

Reinforcement of Certain 

Current Debt Collection Policies 

and Procedures

In January 2002, EOUSA completed actions to address recommendation 5 

by sending a memorandum to all U.S. Attorneys, all First Assistant U.S. 

Attorneys, and all Civil Chiefs, concerning our 2001 report. The 

memorandum generally noted the findings in the report and encouraged 

each district to review its policies and procedures for collecting and 

enforcing criminal debt in light of the report. The memorandum also 

offered the assistance of the districts’ Financial Litigation Program 

Manager in implementing or improving criminal debt collection policies 

and procedures. EOUSA has also worked to reinforce current policies and 

procedures by developing and providing training materials to its staff 

involved in debt collection. Moreover, EOUSA’s periodical DebtBeat, which 

is available to all USAOs, private counsel, and client agencies, regularly 

provides updates on debt collection issues, including any modifications to 

debt collection policies and procedures.

Revision of Policies for Issuing 

Demand Letters

EOUSA used the May 2003 prosecutor’s guide to respond to 

recommendation 6. Specifically, the guide requires FLUs to issue a demand 

letter for payment of a debt for each case opened within 30 days of the 

judgment. To facilitate collection, the guide further specifies that the 

demand letter should inquire whether the defense attorney will continue to 

represent the defendant for collection purposes.

Establishment of Time Frames 

for Certain Criminal Debt 

Collection Activities

EOUSA also used the May 2003 guide to address recommendation 7. As 

stated in our 2001 report, FLUs lacked procedures for performing certain 

debt collection actions in a timely manner, including (1) entering cases into 

their tracking systems; (2) filing liens; (3) sending demand, delinquent, or 

default letters; and (4) performing asset discovery work. The prosecutor’s 

guide provides a specific time frame for performing each of these actions. 

It requires that for each case opened for collection, the responsible FLU 

should, at a minimum, take the following steps within 30 days of the 
Page 18 GAO-04-338 Justice’s Criminal Debt Collection Processes

judgment: open and record the case; initiate the filing of a lien where 

possible; issue a demand letter; and conduct an initial assessment of the 

prioritization and collectibility of the case, which would include 

performing asset discovery work. The guide also states that the responsible 

FLU should provide notice to the defendant of any fine or restitution 

payment that is found to be delinquent or in default within 10 working days 

after the delinquency or default occurs.

Measurement of Criminal Debt 

Collection Performance against 

Goals

To address recommendation 11, according to a Justice official, Justice 

annually assesses each district based on established collection goals for 

that district. The official stated that because of the differences in size of 

caseloads and types of cases worked, it does not make sense for EOUSA to 

establish nationwide goals. Instead, each district establishes and is 

measured against its own collection goals. To assess debt collection 

performance and compliance with applicable guidance and regulations at 

each district, EOUSA uses (1) a goals-setting package, which includes 

instructions for completing goals based on each district’s workload and 

collections; (2) a state-of-the-district report, which provides 3 years of 

detailed district-specific collection statistics to allow each USAO to 

evaluate its own collection activities based on historical experience; and 

(3) a compliance checklist, which provides FLUs with an opportunity to 

review their current policies and procedures to ensure compliance with 

EOUSA requirements. According to the Justice official, EOUSA works with 

each district to prepare these tools annually, and each district uses them to 

determine needed actions to improve criminal debt collection.

Assessment of Human Capital 

Resources and Training

Justice has also assessed its FLUs’ human capital resources and training to 

respond to recommendation 13. According to a Justice official, although 

EOUSA did not prepare a formal written assessment of FLUs’ human 

capital resources, EOUSA has assessed FLU human capital resources and 

determined that FLUs are understaffed and need more staff or contractors 

to perform debt collection activities. However, to date, EOUSA has not 

been successful in requesting additional staff for debt collection. 

Nevertheless, the Justice official noted that EOUSA did receive funding, 

beginning in fiscal year 2002, through the Office for Victims of Crime to 

support asset investigations in criminal debt collection cases. The Office
Page 19 GAO-04-338 Justice’s Criminal Debt Collection Processes

for Victims of Crime provides 50 percent of the funding for asset 

investigators, with the remaining 50 percent to be funded through the 

Three Percent Fund.16 Therefore, half the asset investigators’ time may be 

spent on postsentencing criminal fine and restitution debt collection cases. 

The asset investigators’ services are available through the Financial 

Litigation Investigator Program. Prior to fiscal year 2002, these 

investigators were limited to working solely on civil debts because funding 

for their time was exclusively through the Three Percent Fund.

Corrective Actions in Process to 

Address Remaining 

Recommendations

Justice is in the process of taking corrective actions to address the 

remaining 6 recommendations. Specifically, actions taken to address parts 

1 and 2 of recommendation 1 are still in process.17 In July 2003, EOUSA 

rolled out to all USAOs a new version of its collections case tracking 

system. The new system allows for the tracking of all debt components in a 

single record for each debtor, thus eliminating the need to open multiple 

records to track collections for a single debtor. Also, many of the required 

fields, such as collection types and agency program codes, have been 

coded to eliminate duplicative data entry by the user. However, additional 

upgrades, such as automatic payment posting to debtor accounts, are still 

under development and are scheduled to be completed during fiscal year 

2004. According to a Justice official, complete implementation of this 

recommendation depends on AOUSC upgrading its automated criminal 

debt tracking systems. The Justice official stated that full reconciliation of 

payment information between FLUs and the courts will not be possible 

until AOUSC fully implements its new Civil/Criminal Accounting Module 

16Pub. L. No. 107-273, Div. C., Title 1, § 11013(a), 116 Stat. 1758, 1823 (2002), authorizes 

Justice to deposit in its Working Capital Fund 3 percent of all amounts collected pursuant to 

its civil debt collection litigation activities. Such amounts remain available until expended 

and are to be used first, for paying the costs of processing and tracking civil and criminal 

debt-collection litigation, and, thereafter, for financial systems and for debt-collectionrelated personnel, administrative, and litigation expenses. Section 11013(a) of Pub. L. No. 

107-273, expanded on the authority conferred on Justice by an earlier law (Pub. L. No. 103-

121, Title 1, § 108, 107 Stat. 1153, 1164 (1993)) that limited Justice’s use of such deposits to 

paying the costs of processing and tracking civil debt collection litigation. 

17The May 2003 prosecutor’s guide addresses part 3 of recommendation 1—that Justice 

revise its district guidance so FLUs can take a more proactive role in monitoring collection 

efforts of probation offices. According to the guide, FLUs’ responsibilities for enforcement 

of restitution or a fine include coordination with probation offices while defendants are on 

supervision or probation to facilitate collection, mutual exchange of information, and 

providing advance notice to probation offices of collection methods. Further, the guide 

states that during a defendant’s supervision, the prosecutor and/or the FLU should 

coordinate with each other and with probation offices to facilitate the maximum possible 

collection of the restitution or fine.
Page 20 GAO-04-338 Justice’s Criminal Debt Collection Processes

system, which, according to the official, is not expected to be completed 

until 2005.

Actions to address recommendations 3, 8, 9, and 10 are also in process at 

Justice. We emphasized in our 2001 report the importance of documenting 

key steps in the criminal debt collection process to help ensure that all 

opportunities for collection were being pursued. We also noted that 

because FLUs do not consistently assess interest and penalties, the 

reported amounts do not accurately represent how much total principal, 

interest, and penalties are due. We stressed that failure to assess interest 

and penalties reduces the amount that can be recovered and passed along 

to victims or the federal government and eliminates a tool designed to give 

debtors an incentive to make prompt payments. According to a Justice 

official, the Financial Litigation Working Group, which Justice established 

in February 2002 in part to address our recommendations, will continue to 

work toward fully implementing these open recommendations.

Finally, Justice is in the process of taking corrective actions to address 

recommendation 12. According to a Justice official, EOUSA’s system 

programmers are currently developing automated tracking of debtor status 

from incarceration through probation. EOUSA plans to have such 

automated tracking available during fiscal year 2004. In addition, according 

to the official, EOUSA is working to determine how to allocate outstanding 

criminal debt amounts between amounts likely to be collected and 

amounts not likely to be collected, which is critical for effective use of debt 

collection resources.

Conclusion The long-standing problems in the collection of outstanding criminal 

debt—including fragmented processes and lack of coordination—continue, 

as there is no united strategy among key entities involved with the 

collection process. According to Justice’s unaudited records, during fiscal 

years 2000, 2001, and 2002, criminal debt increased significantly, but 

collections decreased slightly. Until Justice takes actions to fully 

implement our previous recommendations to it to improve criminal debt 

collection efforts, including forming a joint task force with AOUSC, OMB, 

and Treasury and developing a strategic plan to improve the criminal debt 

collection processes, the effectiveness of criminal fines and restitution as a 

punitive tool may be diminished, and Justice’s management processes and 

procedures will not provide adequate assurance that offenders are not 

afforded their ill-gotten gains and that innocent victims are compensated 

for their losses to the fullest extent possible. Therefore, we reaffirm those 
Page 21 GAO-04-338 Justice’s Criminal Debt Collection Processes

recommendations made to Justice from our 2001 report on which Justice 

has not completed action.

Agency Comments and 

Our Evaluation

In written comments on a draft of this report, which are reprinted in 

appendix I, Justice’s EOUSA said that the draft report did not fully reflect 

EOUSA efforts to improve the criminal debt collection process by 

implementing the recommendations from our 2001 report and by taking 

additional actions that go beyond the specific recommendations made in 

that report. We disagree. As stated in this report, Justice has not taken 

timely action to address all of the July 2001 recommendations, which were 

designed to improve the effectiveness and efficiency of Justice’s criminal 

debt collection processes. Most important, from the standpoint of resolving 

key jurisdictional issues and functional responsibilities, Justice has not 

taken action along with certain other agencies to develop a strategic plan 

for criminal debt collection. 

Of the 13 interim recommendations made to stem the growth of reported 

uncollected criminal debt while Justice and the other agencies worked to 

develop the strategic plan, Justice completed action on only 7. Actions to 

address 4 of these 7 recommendations were completed about 2 years after 

we made them, and actions to address the remaining 6 interim 

recommendations are still in process.

In support of its view that it has taken extensive implementation action, 

EOUSA referred to a June 16, 2003, letter and stated that excerpts from this 

letter were included with its comments. We are not aware of a June 16, 

2003, letter; however, all of the excerpts contained in EOUSA’s comments 

are included verbatim in Justice’s July 15, 2003, letter to the Congress 

regarding actions EOUSA had taken in response to recommendations we 

made in our 2001 report. Justice submitted this letter 2 years after the date 

of our 2001 report, and after we had made inquiries about the status of 

Justice’s response to the Congress regarding Justice’s implementation of 

our recommendations. In accordance with 31 U.S.C. 720, the head of a 

federal agency is required to submit a written statement of the actions 

taken on our recommendations to the Senate Committee on Governmental 

Affairs and to the House Committee on Government Reform not later than 

60 calendar days from the date of the report and to the House and Senate 

Committees on Appropriations with the agency's first request for 

appropriations made more than 60 calendar days after that date. Moreover, 

as stated in this report, to evaluate actions Justice has taken to implement 

our previous recommendations, we obtained and reviewed pertinent 
Page 22 GAO-04-338 Justice’s Criminal Debt Collection Processes

Justice documents, including correspondence to certain congressional 

committees related to our 2001 report. As such, in drafting our report, we 

fully considered each of EOUSA’s assertions that were contained in the 

previously mentioned excerpts from its letter. Our responses to specific 

parts of these excerpts appear in appendix I.

EOUSA also stated that our draft report failed to address its comments on 

our 2001 report that responsibility for accounting for and reporting 

criminal debt does not rest with Justice. In our 2001 report, we stated that 

Justice’s comments related to accounting for and reporting of criminal 

debt, plus the lack of response from AOUSC regarding its position on this 

issue, illustrated the need for cooperation and coordination in the criminal 

debt collection area. Thus, we emphasized the need for the development of 

the previously mentioned strategic plan to improve the criminal debt 

collection processes and establishment of an effective mechanism to 

coordinate efforts among all entities involved in these processes. We noted 

that the strategic plan should address managing, accounting for, and 

reporting of criminal debt. It is important to note that, as stated in our 2001 

report, both Treasury and OMB agreed that criminal debt should be 

reported on either Justice’s or the U.S. Court’s financial statements.

Finally, EOUSA stated that our 2001 report focused on asset investigation 

resources and that EOUSA has put particular emphasis in this area. 

EOUSA also stated that even though it has fully implemented more than 

half of our recommendations, with the remaining ones nearing completion, 

collections have decreased slightly since our 2001 report. As previously 

stated, actions to address 4 of the 7 fully implemented recommendations 

were completed about 2 years after our 2001 report, and actions to address 

the 6 remaining recommendations are still in process. Since these interim 

recommendations largely focused on policies and procedures, it is 

important that they be effectively implemented once they are established, 

and it will likely take some time for collection results to be realized from 

full implementation. Moreover, as stated in our report, the debt collection 

strategy to be developed by the task force should include determining the 

collectibility of outstanding criminal debt amounts so that a meaningful 

allowance for uncollectible debt can be reported and used for measuring 

debt collection performance. We also stated that proper accounting for, 

reporting of, and managing of criminal debt would heighten management 

awareness and ultimately result in a more effective collection process. 

Identifying debts with the best prospects for collection will allow more 

efficient targeting of limited collection resources in order to maximize 

collections. 
Page 23 GAO-04-338 Justice’s Criminal Debt Collection Processes

As agreed with your office, unless you announce its contents earlier, we 

plan no further distribution of this report until 30 days after its issuance 

date. At that time, we will send copies of this report to the Chairmen and 

Ranking Minority Members of the Subcommittee on Financial 

Management, the Budget and International Security, Senate Committee on 

Governmental Affairs, and the Subcommittee on Government Efficiency 

and Financial Management, House Committee on Government Reform. We 

will also provide copies to the Attorney General, the Director of the 

Administrative Office of the U.S. Courts, the Director of the Office of 

Management and Budget, and the Secretary of the Treasury. Copies will 

then be made available to others upon request. The report will also be 

available at no charge on GAO’s Web site, at http://www.gao.gov.

If you have any questions about this report, please contact me on (202) 512-

3406 or Kenneth R. Rupar, Assistant Director, on (214) 777-5714. Other key 

contributors to this report are Linda K. Sanders and Michael D. Hansen.

Sincerely yours,

Gary T. Engel

Director

Financial Management and Assurance
Page 24 GAO-04-338 Justice’s Criminal Debt Collection Processes

Appendix I

Comments from the Department of Justice’s Apendxies

Executive Office for United States Attorneys ApendxiI

Note: GAO comments 

supplementing those in 

the report text appear 

at the end of this 

appendix.

See comment 1.
Appendix I

Comments from the Department of Justice’s 

Executive Office for United States Attorneys

Page 25 GAO-04-338 Justice’s Criminal Debt Collection Processes

See comment 2.

See comment 1.

See comment 7.

See comment 4.

See comment 5.

See comment 3.

See comment 6.
Appendix I

Comments from the Department of Justice’s 

Executive Office for United States Attorneys

Page 26 GAO-04-338 Justice’s Criminal Debt Collection Processes

See comment 7.

See comment 12.

See comment 1.

See comment 9.

See comment 8.

See comment 11.

See comment 10.

See comment 13.
Appendix I

Comments from the Department of Justice’s 

Executive Office for United States Attorneys

Page 27 GAO-04-338 Justice’s Criminal Debt Collection Processes

See comment 1.

See comment 1.
Appendix I

Comments from the Department of Justice’s 

Executive Office for United States Attorneys

Page 28 GAO-04-338 Justice’s Criminal Debt Collection Processes

The following are GAO’s comments on the Department of Justice’s 

(Justice) Executive Office for United States Attorneys’ (EOUSA) letter 

dated January 23, 2004.

GAO’s Comments 1. See “Agency Comments and Our Evaluation” section.

2. Our 2001 report responded to a request that we review the federal 

government’s collection of criminal debt, primarily fines and 

restitutions. As such, our review resulted in numerous 

recommendations to Justice and the Administrative Office of the U.S. 

Courts (AOUSC) aimed at addressing the fragmented processes and 

lack of coordination among those entities involved in debt collection 

and at helping to improve collections and stem the growth in reported 

uncollected criminal debt. 

For this report, we were requested to examine the extent to which 

Justice has acted on the recommendations we made in our 2001 report 

to improve criminal debt collection. We acknowledge in our report 

Justice’s use of the Prosecutor’s Guide to Criminal Monetary 

Penalties to address recommendations 2, 6, and 7. Our follow-up work 

did not focus on certain areas covered by the guide, including charging 

defendants and negotiating plea agreements, because such issues were 

not part of the scope of our 2001 report or of this report.

3. We acknowledge in this report that the Financial Litigation Working 

Group was established in part to address the recommendations we 

made in our 2001 report and will continue to work toward fully 

implementing certain open recommendations.

4. Writing legislative proposals that will remove barriers to enforcement 

of criminal debts, such as clarifying that payment schedules set forth in 

court orders are minimum payments due and do not prohibit 

enforcement of the total amount of the obligation imposed, is 

consistent with our 2001 recommendation to AOUSC to revise the 

language in the Judgment in a Criminal Case forms to clarify that 

payment terms established by judges are minimum payments and 

should not prohibit or delay collection efforts. Although we did not 

recommend such action to Justice, its initiative to address this concern 

makes sense.
Appendix I

Comments from the Department of Justice’s 

Executive Office for United States Attorneys

Page 29 GAO-04-338 Justice’s Criminal Debt Collection Processes

5. We acknowledge in our report that Justice provided the prosecutor’s 

guide to all entities involved in criminal debt collection at Justice, and 

we credit the guide with addressing recommendation 2 by requiring 

prosecutors to ensure that responsible Financial Litigation Units (FLU) 

receive all available information on a defendant’s financial resources.

6. We acknowledged and explained in our report EOUSA’s State of the 

District Report and Compliance Checklist in relation to actions taken to 

address recommendation 11.

7. We are aware of EOUSA’s hiring of an independent contractor to 

perform a requirements analysis for a new debt collection system. 

However, as of the completion date of our fieldwork, according to an 

EOUSA official, Justice was in the process of reviewing the contractor’s 

work, and we could not obtain a copy of the contractor’s report until 

the review was complete. Therefore, we are unable to comment on the 

results of the contractor’s review. However, we acknowledge in our 

report EOUSA’s new version of its collections case tracking system, 

including its recent and planned upgrades designed to reduce the data 

entry responsibilities of FLUs.

8. We provide in our report detailed information on Justice’s efforts to add 

criminal debts to the Treasury Offset Program.

9. Our July 2001 report addressed many factors that have had an impact 

on the effectiveness of the criminal debt collection process. That 

report resulted in numerous recommendations to Justice and AOUSC 

to improve debt collection. Justice has taken action to enhance its 

asset investigations resources. In our discussion of Justice’s efforts to 

address recommendation 13, we acknowledge EOUSA’s receipt of 

funding, beginning in fiscal year 2002, through the Office for Victims of 

Crime to support asset investigations in criminal debt collection cases.

10. Assets identified by outside investigators, combined with fervent debt 

collection efforts, could result in potential collections on outstanding 

criminal debts. If investigators found assets for approximately 

$50 million of the $150 million of criminal debts referred to them, the 

potential collection rate for such assets might well exceed the average 

collection rates being experienced by Justice.

11. Although we are aware of EOUSA’s contract for credit bureau report 

services, the issue of credit bureau report services did not directly 
Appendix I

Comments from the Department of Justice’s 

Executive Office for United States Attorneys

Page 30 GAO-04-338 Justice’s Criminal Debt Collection Processes

relate to any particular recommendation made in our 2001 report. 

Therefore, the contract was not addressed in this report. However, we 

agree that credit bureau report services, if properly applied, can 

enhance FLUs’ ability to assess a debtor’s ability to pay.

12. We acknowledge in our discussion of EOUSA’s actions to address 

recommendation 5, that EOUSA has worked to reinforce policies and 

procedures by developing and providing training materials to its staff 

involved in debt collection.

13. In our 2001 report, we recommended that Justice perform an analysis 

to assess whether FLUs’ human capital resources are adequate to 

effectively perform their collection activities. In our discussion of 

Justice’s actions to address recommendation 13 in this report, we 

acknowledge that EOUSA has assessed FLU human capital resources 

and determined that FLUs need more staff or contractors to perform 

debt collection activities. We further state that, to date, EOUSA has not 

been successful in requesting additional staff for debt collection.

(191035)
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