Treasurer to refer nonprofits for debt collection


Associated Press

BATON ROUGE — Louisiana Treasurer John Kennedy said Monday that he’s planning to give the state’s new debt recovery office its first delinquent accounts for collection.

Kennedy said he has a list of 36 nonprofits that received $4.5 million in tax money from lawmakers but haven’t complied with state financial reporting requirements.

The treasurer said if the nonprofits don’t file the documents, like quarterly progress reports about the use of the state money, he’s going to refer them to the Office of Debt Recovery, seeking to get the money repaid.

The treasurer’s office said the non-government organizations, or NGOs, have until the end of August to comply with the reporting or face collection efforts through the newly-created debt recovery agency.

“This is taxpayer money, $4.5 million. Taxpayers worked hard for it, and the money was given by the Legislature to NGOs under certain conditions. Those conditions weren’t met, and they’ll have to return the money,” Kennedy said.

On the treasurer’s list are organizations like the Treme Community Education Program in New Orleans, which received $325,000; the Wilbert Tross Sr. Community Development And Counseling Center in Gretna, which received $350,000; the Rapides Primary Health Care Center in Alexandria, which received $550,000; and the Purple Circle Social Club in Baton Rouge, which received $50,000 from lawmakers.

Lawmakers set up the Office of Debt Recovery in the last legislative session, as a way to drum up more money for the state treasury after years of repeated budget shortfalls.

But it’s unclear how long it will take for the nonprofits to face collection efforts. The Department of Revenue, which oversees the debt recovery office, is still working to get the agency up and running in coordination with collection efforts at the attorney general’s office.

Revenue department spokesman Doug Baker said he’s hopeful the Office of Debt Recovery will be operating by the end of 2013, with back-owed debts being collected before the fiscal year ends June 30. “It’s well under way,” Baker said.

Revenue Secretary Tim Barfield and Attorney General Buddy Caldwell sent a letter to agency leaders earlier this month, notifying them of the bolstered collection plans and the information that will be needed from each agency about outstanding debts.

The Office of Debt Recovery will have the authority to revoke and suspend state-issued licenses and offset tax refunds or other state accounts payable until a debt is paid. Under the law, the office can start accepting delinquent accounts for collection on Aug. 17.

Estimates are the efforts could generate up to $200 million over five years, with as much as $30 million brought in this year.

Agencies will be required to refer all their delinquent accounts to either the attorney general’s office or the new debt recovery office for collection. The debts will have to be referred quickly, once they are 60 days old.

Louisiana’s delinquent accounts reached $1.4 billion in the most recent tally. Before the debt recovery office was created, the state had no unified collection system to handle all state government debts.

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