The collection of outstanding criminal debt has been a long-standing problem, with many of the issues that we have been reporting on since October 1985 still remaining. Since that time, as reported in the U.S. Attorneys’ statistical reports, the balance of outstanding criminal debt has grown from $260 million to over $13 billion (see figure 1). The Congress attempted to address some of these problems through the Criminal Fines Improvement Act of 1987 when it transferred the responsibility for accounting for and processing criminal debt from Justice to the courts and gave them the responsibility for establishing a centralized accounting system (see appendix II, “History of Criminal Debt Collection Legislation”). In 1990, the Administrative Office of the United States Courts (AOUSC) began developing a centralized entity, called the National Fine Center (NFC) to record, track, and report on federal criminal debt. The NFC was expected to automate and centralize criminal debt processing for the 94 federal judicial districts and provide a management information system to replace the existing fragmented approach for receiving payments and alleviate long-standing weaknesses in accounting for, collecting, and reporting on criminal monetary penalties imposed on federal criminals. However, after several years of developing a National Fine Center that was criticized by GAO and the Congress, the AOUSC engaged an independent consulting firm in February 1996 to perform a full review of the project. The consulting firm concluded that the task of developing a National Fine Center, involving several agencies in two branches of government, proved to be more complex than expected and that the needs of the districts could not be met through a centralized approach. Thus, with the consent of the Congress, the NFC was terminated. As such, the criminal debt collection process continues to be fragmented, involving both judicial and executive branch entities in 94 districts across the country. Also, around the time of the consultant’s report, the Mandatory Victims Restitution Act of 1996 (MVRA) was enacted, requiring that restitution be assessed at the full amount regardless of an offender’s ability to pay. Since that time the balance of reported uncollected criminal debt has increased dramatically. Reported uncollected criminal debt has more than doubled from about $5.6 billion as of September 30, 1995, to approximately $13 billion as of September 30, 1999, with about 66 percent of that amount attributed to restitution owed to nonfederal parties. The collectibility rate however has not increased proportionally. Criminal debt arises when a court orders an offender to pay fines and/or restitution as part of the punishment for violating a federal criminal law. Unless the offender immediately pays the debt, Justice is responsible for enforcing its collection. Justice has delegated this responsibility to its Financial Litigation Units (FLU) in the United States Attorneys’ Offices (USAO) across the country. As of September 30, 1999, the Executive Office for United States Attorneys (EOUSA) database reflected approximately $13.1 billion in reported outstanding criminal debt, of which about $5.6 billion (or 43 percent) was accounted for by the four districts we visited (see figures 2 and 3 for a breakout of the major types of criminal debt involved). Each of the 94 districts has a USAO, an executive branch agency, and a U.S. district court that includes district judges, a clerk’s office, and a probation office within the judicial branch of government. The districts operate independently from one another with guidance provided by the offices indicated in table 1. In addition to general guidance provided by Justice, the Judicial Conference, and the U.S. Sentencing Commission (USSC), each district office develops supplemental guidance for criminal debt collection procedures. Within each district, the USAO, probation office, and the clerk’s office enter into a memorandum of understanding (MOU) that documents how criminal debt collection activities will be accomplished. Each of the USAOs also has a Financial Litigation Plan that details district guidance on collecting criminal debt. The following sections provide additional detail on (1) assessing criminal fines and restitution and (2) accounting for and collecting criminal debt in this currently decentralized and fragmented environment. Agencies such as Justice’s Federal Bureau of Investigation and the Drug Enforcement Administration investigate violations of federal law and refer the results of their investigations to a local USAO (see figure 4 for a general overview of the criminal debt assessment process). The country is divided into 94 federal judicial districts, with a federal district court in each district. Each of the 94 districts is located in one of 12 regional circuits, and each circuit has a Court of Appeals. After the USAO obtains the conviction of an offender, the court issues a Judgment in a Criminal Case (JCC), which details terms of the sentence and orders the payment of a fine and/or restitution, if applicable. To assist judges in determining the fine and/or restitution amount, a probation officer prepares and provides to the court a pre-sentence report that includes financial information related to an offender’s ability to pay a fine and information related to victims’ losses. In preparing the pre-sentence report, probation officers are to use financial information obtained from the investigating agency, the trial, and the offender. In deciding whether to assess a fine and, if so, the amount to assess, courts are to consider an offender’s income, earning capacity, and financial resources; the potential burden placed on an offender’s family; and any restitution or other obligations that the offender is required to make. For example, if large amounts of restitution are ordered, the assessment of fines is typically waived based on the offender’s inability to pay a fine. USSC guidelines provide guidance on the minimum and maximum fine amounts for the U.S. courts to impose based on the offense. The statute requires the court to order the payment of a fine immediately unless, in the interest of justice, the court provides for payment on a date certain or in installments. According to the guidelines and the statute, judges may consider whether paying the fine in a lump-sum would have an unduly severe impact on the offender or any dependents, and if so, should establish an installment schedule for paying the fine. The installments should be in equal monthly payments over the period established by the court, unless the court establishes another schedule. The length of time over which scheduled payments should be made is the shortest time in which full payment can reasonably be made, generally not to exceed 12 months. In addition, judges may waive fines if they believe that offenders will be unable to pay and are unlikely to become able to pay (e.g., if they are sentenced to life in prison or cannot afford to hire private counsel). Judges may also order restitution to be paid to the victims of a crime. In accordance with statute, before MVRA was enacted in April 1996, the court typically waived or reduced the restitution amount based on the offender’s ability to pay. However, under MVRA, the court typically must order restitution to each victim in the full amount of each victim’s loss, without regard to an offender’s economic situation. If the court believes that an offender cannot immediately or fully pay the restitution amount in the foreseeable future, the court can order the offender to make nominal installment payments. In some districts, judges must set the payment schedules and document them in the JCC, and in other districts, judges can delegate to probation officers the authority to set payment schedules. However, within the last few years, more judges have been required to establish payment schedules as a result of several circuit court decisions that have affected policies in this area. For example, some circuit courts have held that courts are prohibited from ordering a defendant to pay criminal fines or restitution in accordance with a payment schedule set by a probation officer or a prison official because the setting of a payment schedule is an inherently judicial function that may not be delegated to others. In addition, some circuit courts have prohibited the imposition of an immediate payment order of the entire amount unless the defendant can pay the entire amount immediately. Finally, some circuit courts have interpreted the MVRA to require the court to set the payment schedule in all cases at sentencing. After the assessment process, the criminal debt collection process varies depending on the other sentencing terms imposed on the offender. Figure 5 shows the typical post-MVRA criminal debt collection process. The FLUs within the USAOs’ Civil Divisions have been delegated the responsibility for collecting criminal debt. After receiving a JCC, the FLU enters information from the JCC into the FLUs’ case tracking system and performs certain collection actions depending on such factors as the amount of the debt. The FLUs’ collection efforts include filing liens (based on debtor’s address or county of known residence), identifying debtor assets, garnishing debtor wages, and serving notice of late payments. To facilitate collection and reduce duplication of effort, the entities involved with assessing and/or collecting criminal debt (investigative agencies, prosecuting attorneys, and the courts) should share the financial information they have obtained about the offender with the FLUs. Offenders are encouraged to participate in the Bureau of Prisons (BOP) Inmate Financial Responsibility Program (IFRP). This program provides a means of collecting voluntary periodic deductions from inmates’ wages earned from a prison occupation. The amounts are generally small and are deducted periodically (e.g., monthly, quarterly, or semiannually). When released from prison or as ordered by the judge at sentencing, the offender is assigned to a probation officer. If the criminal debt has not been paid, the probation officer or the court, depending on the district, should establish an installment schedule for payment. Probation officers may restrict offenders from performing certain activities, such as traveling outside the district, if they are not making their required payments. Probation officers may also request that the court revoke supervision (i.e., send an offender to prison) if the offender is willfully refusing to make payments.