The state controller’s debt collection program created at my request during the 1999 legislative session is emerging and proving to be a worthy revenue generator for the state of Nevada. I am proud to say my office has collected $2.5 million in debts owed the state that would have otherwise gone uncollected.
After beginning with only a handful of state agencies utilizing the service, it is truly proving its merit as more agencies clamor to get on board with our office. Currently, 18 state agencies, boards and commissions have contracted with the state controller’s office for debt collection services and two more contracts are pending. There is no fee to the agencies for our services.
Seeking new sources of revenue is important to both government and private industry, but the payment of outstanding debts cannot be ignored. It is good business practice and makes sound financial sense to make every effort to collect monies already owed. The controller’s office is authorized to act as the centralized point of collection for the state. However, we can only collect debt voluntarily referred to us by a state agency. Of the estimated $195 million in outstanding debt to the state, only $6 million has been turned over to our office for collection. Yet, we are collecting at a rate of over $3,000 per day.
As centralized debt collection continues to mature, I hold true to the principles that have made the program such a success, maximizing revenues, minimizing costs and serving state agencies through the use of innovative debt collection tools. Outsourcing debt collection is one of the most cost-effective ways to collect debt as the majority of the cost to collect is passed onto the debtor. My office currently has contracts with two private debt collection firms – OSI Collection Services, Inc. and RecoverMetrics, a subsidiary of Nevada-based Crisis Recovery. Our warrant-offset project identifies debtors who bill the state for goods or services. When a vendor owes the state, a hold status is placed on any payment voucher processed so the vendor is rejected by the system. The amount of the intercepted payment is transferred to the agency owed.
During the past legislative session my office added another tool to aid our debt collection program. A uniform statewide returned check fee of $25 for non-sufficient funds checks written to the state was put into place. We had discovered that not all state agencies were charging a non-sufficient funds fee to those who remitted a bad check. Apart from being a standard business practice, it aids the state in recovering some of the costs associated with processing bad checks, and also strengthens the debt collection program by allowing us to submit for collection some checks that would have otherwise been too small to collect. This new fee goes into effect January 1, 2004, and it is estimated to generate over $80,000 in additional revenue.
I saw the realization of another long-term goal this year with the completion of the state’s Integrated Financial System. I began the implementation of this project to replace our antiquated and ailing group of systems no longer compatible with modern technologies, during my first term as state controller. We have put into operation a comprehensive software system that enables financial communication between every state agency. The system now serves as the backbone for every financial transaction within the state of Nevada. I am also thrilled to say the project was completed six months ahead of schedule and within budget.
As everyone knows, the economic condition of our state is fragile and as challenging as in any period in our 139-year history. The controller’s office remains committed to economic accountability to the people of the state of Nevada in preparing for our future. As Nevada’s chief financial officer, I stand by my commitment to fiscal responsibility by looking for new ways to reduce spending, increase revenues, and operate as effectively and efficiently as possible.