COUNTY OF SAN MATEO
Inter-Departmental Correspondence

Employee and Public Services Department

DATE:

October 22, 2003

BOARD MEETING DATE:

November 18, 2003

TO:

Honorable Board of Supervisors

FROM:

Mary Welch, Director of Employee and Public Services
Girdie Bernard, Division Manager, Revenue Services

SUBJECT:

Request for Relief of Accountability of Delinquent Accounts

Recommendation

1. Adopt a resolution authorizing the abandonment of collection effort and relief of accountability for certain San Mateo County accounts receivable totaling $4,499,833.12 for the fiscal year 2002-03.

2. Adopt a resolution authorizing the abandonment of collection effort and relief of accountability for accounts receivable totaling $265,680.69 handled by the Human Services Agency for fiscal year 2002-03.

Background
The Revenue Services Division is responsible for collecting monies for services rendered or for fines against persons who do not make payment. Typical collection accounts include court fines, medical and clinic services, welfare over-payments and private defender fees.

The accounts handled by the Human Services Agency are for Welfare Assistance over-payments.

The Government Code provides that the County can seek relief from collection efforts for uncollectible accounts by writing off uncollectible debts after collection efforts are unsuccessful. County Administrative Memorandum Number D-10 provides that such accounts be taken to the Board of Supervisors to request relief. Per County policy, we are now submitting our write-off request for fiscal year 2002-2003.

Discussion

The recommended write-off for FY 2002-2003 is $4,499,833.12. The amount is consistent with the amount of the write-off approved by your Board for fiscal year 2001-02 for $4,690,000. The HSA amount is also in line with write-offs that have been done for these types of accounts in the past.

In fiscal year 2002-03 Revenue Services collected a total of $18 million this represented $500,000 over our projection of $17.5 million. Revenue Services has consistently provided quality collection services for the County at a cost which is lower than companies in the private industry.

Revenue Services Accounts

Accounts presented for abandonment fall into six categories of uncollectibility. These are:

· Accounts that are too small to warrant further collection efforts. Examples include: initial account balances that are too small; and remaining balances on accounts that are too small. The uncollectible funds in these accounts for fiscal year 2002-03 total $49,704.92. There are no uncollectible funds in accounts over $10,000.

· Accounts lacking sufficient information for collection. Examples include: clients identified by name and general delivery address but without any other information; and clients who have moved and cannot be located. The uncollectible funds in accounts under $10,000 for fiscal year 2002-03 total $356,073.61. The uncollectible funds in accounts over $10,000 total $14,431.14.

· Accounts on which all collection efforts and options have been exhausted. Examples include: accounts that have aged beyond the statute of limitations for collection; and accounts that have been worked by Revenue Services staff and then referred to outside collection agencies and returned as uncollectible. The uncollectible funds in accounts under $10,000 for fiscal year 2002-03 total $2,710,887.33. The uncollectible funds in accounts over $10,000 total $826,202.65.

· Accounts for which the client has no resources to pay. Examples include: clients who have died and left no estates; clients who have died and left insolvent estates; and clients who are bankrupt and have no attachable assets. The uncollectible funds in accounts under $10,000 for fiscal year 2002-03 total $165,838.92. The uncollectible funds in accounts over $10,000 total $228,678.95.

· Accounts that were erroneously established and billed at the point of service. Examples include: clients who received services while incarcerated; and clients who received care or services while they were minors. The uncollectible funds in accounts under $10,000 for fiscal year 2002-03 total $53,543.68. There are no uncollectible funds in accounts over $10,000.

· Accounts that, if further collection efforts were pursued, would place the client in extreme hardship. Examples include: clients who are Medically Indigent Adults; and clients who would become destitute as a result of making payment. The uncollectible funds in accounts under $10,000 for fiscal year 2002-03 total $94,471.92. There are no uncollectible accounts over $10,000.

Attachment A provides a detailed listing of recommended write-offs by type of account and department.

Attachment B provides details on each of the 55 accounts over $10,000 recommended for abandonment.

Human Services Accounts

The HSA accounts totaling $265,680.69 are all under $10,000 and represent debts for Welfare Assistance over-payments. Over-payments can occur when clients incorrectly or fraudulently report their status or earnings. These amounts are being written off due to their age, and all attempts at collection have been exhausted. These include initial Human Services Agency billings, Revenue Services collection efforts, and the use of the State income tax intercept program.

Pursuant to the Terms of Government Code section 25258(b), the names of the assessees or persons liable and the amounts owed by each is incorporated by reference in this application are permanently maintained in the office of the Board of Supervisors for the County of San Mateo.

Vision Alignment
This item keeps the commitment of responsive, effective and collaborative government through goal number 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.

Fiscal Impact
By virtue of the age and condition of the accounts, there is little chance of recovery of the $4,765,513.81. The accounts are not included in the amount provided to the Controller as collectible and thus will not affect the County's financial statement.