GENERAL SERVICES ADMINISTRATION
Washington, DC 20405
CFO 4200.4A CHGE 1
September 29, 2017
GSA ORDER
SUBJECT: Deadline for Potential Claims Review and Validation
1. Purpose. This Order expands the policies issued under GSA Order, CFO 4200.4, Deadline for Potential Claims Review and Validation, dated December 22, 2015, which established a 60 calendar day deadline for Regions to review and validate potential claims identified through the General Services Administration’s (GSA) Recovery Audit. A Recovery Audit is the process of reviewing disbursement transactions and accompanying supporting documentation to identify and recover under or over payments to GSA vendors. This audit is conducted by a Recovery Audit Contractor (RAC) and GSA staff. The prior Order did not have deadlines for how long the RAC and the Region have to resolve discrepancies or how long the Recovery Audit Contracting Officer Representative (COR) has to review and approve the validated claims received from the Region. This Order addresses this by allowing (1) 15 calendar days for the RAC and the Region to resolve any discrepancies in the amount identified by RAC and (2) 15 calendar days for the Recovery Audit Contracting Officer Representative (COR) to review and approve the validated claims received from the Region. These timeframes are needed for the timely collection of debts owed to the Government, and to comply with Federal policy guidance for prompt processing and collection of Federal claims.
2. Background. Office of Management and Budget (OMB) Circular No. A-123, Appendix C assigns responsibility for claims monitoring and collection to agency Chief Financial Officers (CFOs) and the Department of the Treasury/Bureau of Fiscal Service/Debt Management Services (DMS). The Office of the Chief Financial Officer (OCFO) is responsible for monitoring and processing claims for erroneous payments and other identified claims in accordance with GSA internal directive, CFO P 4253.1B, Accounts Receivable and Debt Collection Manual. The Improper Payments Elimination and Recovery Act of 2010 (IPERA) under Public Law 111-204 requires GSA to perform a payment recapture audit on all programs with annual expenditures of $1 million or more. GSA complies with this, in part, by hiring a RAC.
3. Cancellation. This Order cancels CFO 4200.4, Deadline for Potential Claims Review and Validation, dated December 22, 2015.
4. Explanation of change paragraph.
a. Paragraph 6L, References, is added to provide a complete list of applicable laws and regulations to this policy.
b. Paragraph 7, Policy, is revised to update requirements for issuing initial demand letters for debts owed to the government.
5. Scope and applicability. The provisions of this Order apply to all GSA Services and Staff personnel who are responsible for review and validation of potential claims.
This policy applies to the Office of Inspector (OIG) only to the extent that the OIG determines it is consistent with the OIG's independent authority under the IG Act and it does not conflict with other OIG policies or the OIG mission.
6. References.
a. Debt Collection Improvement Act (DCIA) of 1996, 31 U.S.C. § 3701 et seq.
b. Code of Federal Regulations (CFR), Title 48 - Federal Acquisition Regulations System, Part 32, Subpart 32.6-Contract Debts and Part 33 - Protests, Disputes, and Appeals.31 CFR Parts 900-904, Federal Claims Collection Standards, dated July 1, 2011.
c. Improper Payments Elimination and Recovery Act (IPERA) - Public Law 111-204, dated July 22, 2010.
d. OMB Circular A-123, Management’s Responsibility for Enterprise Risk Management and Internal Control, Appendix C, dated July 15, 2016.
e. GSA Order, CFO P 4253.1B, Accounts Receivable and Debt Collection Policy Manual, dated July 17, 2015.
f. 31 U.S.C. 3726 Travel & Transportation Reform Act of 1998 and 41 CFR 102-118 Transportation Payment and Audit, Subpart F Claims and Appeals Procedures.
g. Digital Accountability and Transparency Act (DATA Act), Public Law 113-101, dated May 19, 2014.
h. GSA Order, CFO 4252.1C, Accounts Payable Manual, dated August 7, 2017.
i. Improper Payments Elimination and Recovery Act of 2012 (IPERIA; Pub. Law No. 112-248).
j. Improper Payments Information Act of 2002 (IPIA; Pub. L. No. 107-300), as amended.
k. OMB Circular A-136, Financial Reporting Requirements, dated October 7, 2016.
l. OMB Memorandum M-15-02 dated October 20, 2014, Requirements for Effective Estimation and Remediation of Improper Payments.
7. Policy.
a. Potential claims that are identified by GSA’s RAC.
Each potential claim shall be evaluated and determined to be (i) valid, (ii) invalid, or (iii) partially valid, by the responsible Contracting Officer (CO) or GSA designee (Region). The review and validation of potential claims must be in accordance with GSA Recovery Audit Program outlined in CFO 4252.1C, Accounts Payable Manual.
(1) Regions have 60 calendar days to validate a potential claim from the Recovery Audit Exit Conference date (i.e., the date the RAC, Region, and COR meet to discuss the claims that the RAC confirmed during the Region audit). Regions may request an exception to the 60-day requirement. Any request for consideration of an exception must be in writing, sent via email to the OCFO Office of Financial Management, Internal Control Division (BGI) Director, and must include a justification, and an expected completion timeframe. A reason for exception might be a delay because claim requires a review by the Office of General Counsel (OGC). Also, an exception may be granted if critical workload demands warrant a departure from the 60-day requirement. The BGI Director is responsible for reviewing and approving exception requests on a case by case basis related to the recovery audit program.
(2) When there is a discrepancy between the claim amount identified by RAC, and the claim amount approved by Region, the RAC & Region must resolve them within 15 calendar days.
(3) All potential claims validated by the Region will be forwarded to the COR for review and approval. The COR has 15 calendar days to approve claims. In the event the COR does not meet the deadline, the COR will inform his/her supervisor, the BGI Director; providing justification for the delay and a timeline for completion of the review process.
(4) Once a potential claim has been validated by the Region and COR, the approved claim is then transmitted to the OCFO Federal Shared Service Provider (FSSP), and the claims receivable is established. The contracting officer, as soon as he/she has determined that an actual debt is due the government and the amount, must issue the demand for payment in the form of written notification to the debtor within 10 calendar days after receiving claim documentation. Contracting officers are not required to issue demand notices from errors made by the payment office or for interest, penalties and administrative fees (IPA) accrued but not included in the remittance sent by debtor. The FSSP will prepare and mail demand letters for these accrued amounts. For claim forms that are marked “Collection Process Initiated by Region”, the contracting officer will be responsible for issuing the initial demand letter to the debtor. A copy of the letter must be forwarded to the FSSP for compliance with the Debt Collection Improvement Act.
b. Potential claims identified by GSA.
When a potential claim is identified, it must be promptly communicated to the appropriate CO or other designated acquisition official for analysis.
(1) Regions have 60 calendar days to determine the validity of a potential claim from the date it is received, and initiate claim actions with the FSSP if the claim is valid. Regions may request an exception to the 60-day requirement. A reason for exception might include delays caused by claims under review by OGC, or an exception may be granted to regions if critical workload demands warrant a departure from the 60-day requirement. Any request for consideration of an exception, must be in writing, sent via email to the OCFO Office of Financial Management, Financial Policy Division (BGN) Director, and must include a justification and an expected completion timeframe.
(2) All potential claims validated by the region should be sent to FSSP to establish a claim receivable. The contracting officer will issue written notification in the form of a demand letter to the debtor within 10 calendar days after receiving claim documentation, unless an alternative approach is otherwise approved by the region and OCFO. For instance, a region may receive refund from debtor, or may offset future invoices. Contracting officers are not required to issue demand notices from errors made by the payment office or for interest, penalties and administrative fees (IPA) accrued but not included in the remittance sent by debtor. FSSP will prepare and mail demand letters for these accrued amounts.
(3) GSA FSSPs must follow the guidance outlined in GSA Order, CFO 4252.1C and CFO IL-15-03, Accounts Receivable and Debt Collection Policy Manual Revision, dated July 17, 2015; and this Order. CFO 4252.1C will be updated to reflect the provisions in this Order.
8. Contact information. For further information, please contact Jeffery Bowman at 202-501-2620 or at jeffrey.bowman@gsa.gov.
9. Signature.
/S/
GERARD E. BADORREK
Chief Financial Officer
U.S. General Services Administration