How Smart Government Collects Debt

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How Smart Government Collects Debt

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How Smart Government Collects Debt

Michelle BurkCIOOhio Attorney General Mike DeWine

Debra Gates


Shelby County Trustee


Ohio is implementing Debt Manager, and Shelby County is looking back on two years of live production using Debt Manager. We'll start the discussion with Michelle and Sharukh, and the motivations they had for selecting and implementing a new platform.

Starting the Discussion


While each revenue agency is unique, there are three common basic strategic goals:Maximizing revenuesImproving constituent servicesMaximizing agency efficiencyReduce expensesImprove Technologies

Goals—Mission Impossible?



Ohio’s centralized collection environment in which economies of scale are present, significant efficiencies are gained allowing government to collect more of the liabilities that are owedOhio has implemented a robust centralized collection division with the necessary tools and state statutes to efficiently process delinquent debtsOhio is continuing to build upon the current collection environment by improving and implementing current industry tools, technologies and processes Individual government agencies, cities and counties lack the economies of scale to bring the tools, workflow processes, and technologies needed to materially improve collections. Ohio statute enables centralized debt collections through Ohio Attorney General's Office

State of Ohio



The evolving landscape with regulatory agencies. Will have a serious impact on the Accounts Receivable Management (ARM) industry for all areas of accounts receivablesCFPB, Consumer Financial Protection Bureau TCPA, Telephone Consumer Protection Act FDCPA, Fair Debt Collection Practices Act IRS 1075 security requirements and the focus on augmenting the collection process

Compliance Management—The Evolving Landscape



Centralizing the debt collection process in conjunction with accounting and other debtor/constituent servicesChanges in technologies Increased ability to use newer communication channels—Instant messaging, Web portals, Web services, telephone dialers, IVRs, Email, Text Messaging Auto Fund withdrawals, improved payment processing methods Tax offsets will reduce basic costs to collect

Automation in Collection Management



The Co-mingling of IRS FTI data vs. Non-FTI data is a significant challengeThe labeling, masking and tracking the FTI to the database element is a necessary processSecurity is very important to all levels of Government State and local governments will experience increased demands on budgets to meet security demands of taxpayer/constituent to secure personal and business information

IRS 1075 Security Requirements



Federal regulations, polices, laws, established by the IRS and or by state and local government continue to be implemented Increased business requirements for security as well as compliance standards that influence the profitability for collection agencies and law firms will result in increases in collection fees as well as reduced collection performance on various types of industry debtsReceivables such as local government revenues, court fees, traffic fines, operational licenses and fees, permits, taxes

Debt Collection At State Level—Regulations and Budgets



Implementing State of the Art IVR Inactive Voice Response systems Aspect Automated Dialer processingSAGE Accounting Systems and LedgerCustomer Payment PortalsClient and External resource portalsSupply Chain ManagementSkip Tracing Services and ResourcesReporting and Dashboard capabilities

CIMS Roadmap—Increasing Debt Collection Through Automation



Trustee is known as the Treasurer in some statesBankerOver $2.6 billion cash receipts/disbursementsInvestorCurrent portfolio—$467 millionBills and collects property taxesRepresents 60% of the county’s $1.2 billion budget2013—$758 millionCollects for 6 other municipalities, including City of MemphisCollection Rate95% of current year taxes for the 1st year99% within three years

More About Us…



Debt has long been a persistent reality for government agencies. Uncollected U. S. outstanding receivables now stand at an estimated $200 Billion and a significant portion of these accounts are as old as 12 years. In the meantime, budget gaps continue to expand by the billions and the demand on government services grows and revenues remain flat.~ Governing MagazineSeptember 2014“Revenue Revival”

Revenue Challenge


Collect more money with a declining tax baseReduce expenses

Goals—Mission Impossible?



Collection DepartmentNo enterprise-wide system (Microsoft Access/Excel)Pre-Tax Sale/Tax Sale4-6 tax sales per yearBankruptcy2,500 active casesCollect $3.3 Million annuallyLegalApproximately 41,000 delinquentSue 50%—$17.5 MillionCollection activities




What we believedAggressive18 collector positions on staffOutbound calls with follow-upWhat was occurring…Manual spreadsheet approachHouse effortsMinimal outbound callsAdministrative supportLegal activity was primary driverBankruptcy

Collection Activities



AffordableIntegrate with our current systemSimple importing/exporting of dataBatch or Real-timeUse in-house programming staff due to monetary constraintsConvert data/Develop/Maintain/UpgradeFlexible due to constantly changing demandsNo forces dependency on vendor for business logic changesUse automation to touch more accounts

Debt Management System



June 2011Signed contractJune 2012Converted and balanced2.4 Million receivables11.1 Million transaction recordsJune 2013Workflow collection strategiesAutomated account assignmentsMonitor and track individual collection effortsMeasure collection results

The Age of Titanium (FICO® Debt Manager™ solution)



The Age of FICO® Debt Manager™ solution

Professional Advice—FICOOperational RecommendationsData Driven Strategy—9 months out

ResultsAdded focus to 1st 90-120 daysEstablished dedicated group of collectors making only outbound callsGoals—monetary and call volumeMeasure and publish resultsCreated incentivesDifferent channels of communication (in order of priority)SMS Messaging—548% returnEmailAutomated callsSnail Mail



Additional $6 million during first 120 days out of delinquency

80 basis point increase

2013 Revenue Impact



Forecasted Operational Impact



Refine:Compare new strategies to baselineWorkflow automationAdd Tax Sale ProcessFoster a desire to be part of the Elite Collector groupImprove collector reporting/statisticsAutomate the different communication channelsNow it is “Manual” AutomationFICO Adeptra

The Foreseeable Future






Thank You!


Debra Gatesdgates@shelbycountytrustee.comPhone

Michelle Burk




Learn More at FICO World

Related SessionsCollection Platform Success in a Transitioning EconomyThe New Normal: Adopting and Adapting to Drive Sustainable, Profitable GrowthProducts in Solution CenterFICO® Decision OptimizerFICO® Debt Manager™ solution FICO® Customer Communication Services: CollectionsExperts at FICO WorldCheryl MillerKeith Hill Catherine WhitelawRob Robb White Papers OnlineFive Imperatives in a Shifting Collections LandscapeHarnessing the Speech Analytics



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Michelle BurkOhio Attorney General Mike DeWineColumbus, Ohio



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