HD52 - Most Cost-Effective Strategies for Improving Virginia's Collections of Receivables, Including Both General and Nongeneral Fund Receivables


Executive Summary:
The Attorney General was directed to provide this special report by § 1-18, Item (52)(D) of the 2006 Appropriation Act, which states:

The Attorney General shall provide a report on the most cost-effective strategies for improving Virginia's collections of accounts receivable, including both general and nongeneral fund receivables. The Secretary of Finance shall provide assistance as necessary in the preparation of this report. Copies of this report shall be provided to the Governor and the Chairmen of the House Appropriations and Senate Finance Committees by October 16, 2006.

This issue was studied by analyzing the current practices and controlling legislation of the four agencies with broad legislative mandates to oversee the collection of the Commonwealth's receivables and by sampling the collection practices of other states and Virginia law firms that specialize in collection of receivables. As the study of legislation and collection practices progressed, promising areas for improvement were noted. Thus, this special report concludes with the Attorney General's broad recommendations in the areas of technology, legislation, and collection processes.

Specifically, the Attorney General makes two recommendations that involve collaborative efforts between his Office and other entities with related missions. These recommendations are:

• Establish an ongoing taskforce comprised of representatives from the different entities charged with collecting the Commonwealth's receivables and legislative staff members to address common vulnerabilities in the areas of technology, legislation, and processes.

• The Attorney General will explore the feasibility of partnering with Better Business Bureaus throughout the Commonwealth to publish a current list of companies with unsatisfied judgments in favor of the Commonwealth.

In addition, the Attorney General offers two recommendations regarding legislative action. These recommendations propose specific statutory amendments and suggest future legislative initiatives. The recommendations are:

• Statutory changes are required to clarify the unique nature of all debts to the Commonwealth.

> Under this recommendation, specific amendments are proposed to the Appropriation Act and Code of Virginia to enhance the Commonwealth's collection of accounts receivable.

• The Attorney General will work with the Department of Planning and Budget to study the fiscal impact of certain initiatives.

> This recommendation proposes a study to determine whether certain initiatives will result in a significant positive fiscal impact.

> These initiatives include conforming administrative processes to allow agencies that issue final administrative orders to docket and enforce the orders as circuit court judgments; establishing oversight for collection agencies within the Office of the Attorney General; amending § 8.01-66.9 of the Code of Virginia regarding collection of Medicaid liens; amending § 46.2-110 of the Code to establish strict liability for damage to highway property maintained by the Commonwealth; and formation of a statewide "lien depository' for administrative and judicial liens of the Commonwealth.