RICHMOND, NOV. 16 -- State Attorney General Mary Sue Terry proposed today that her office significantly expand its role in helping to collect more than $400 million in debts to state agencies.
"The same principles that apply to collecting debt at Sovran Bank . . . are the principles that apply to state government," Terry told the Virginia House Appropriations Committee.
She gave the committee a report showing that her office had doubled overdue collections for five state agencies during a two-year pilot program.
The program involved the State Education Assistance Authority, the Department of Transportation, the Department of State Police, the Industrial Commission and the Medical College of Virginia Hospitals. According to Terry, such collections for the 1986-87 budgetary year were $6.1 million, up from $2.8 million in 1984-85 and $3.7 million in 1985-86.
But the program "is just beginning to touch the tip of the iceberg" on uncollected state debts, she said in urging its expansion to other state agencies. "We recommend that you allow us to proceed on an agency-by-agency basis . . . to develop debt recovery plans."
She said the goal is to make agencies as self-sufficient as possible in collecting debts and to give the attorney general's office the authority to decide when further steps must be taken to enforce payment.
Terry said her office's collection efforts have been self-supporting, with an estimated carryover of $114,000 to the next budget year. The office gets fees for its work as part of collection agreements with the five agencies; for the last fiscal year, the office collected $13 for each $1 spent and kept 8 percent of total collections as fees.
Paul W. Timmreck, director of the Department of Planning and Budget, said that about 90 percent of overdue debts involves the Department of Taxation; the Division of Child Support Enforcement in the Department of Social Services; the Department of Mental Health, Mental Retardation and Substance Abuse Services; the Virginia Employment Commission, and the state's two teaching hospitals.
Terry said that some agencies, such as the tax agency and the U-Va. hospitals, already have excellent in-house collection offices but that others have little training in the subject and could benefit from a central program.