6509.11h, 22-25
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FOREST SERVICE HANDBOOK
Portland, Oregon
FSH 6509.11h SERVICE-WIDE CLAIMS MANAGEMENT HANDBOOK
R6 Supplement No. 6509.11h-97-1
Effective April 28, 1997
POSTING NOTICE. Supplements are numbered consecutively by title and
calendar year. Post by document name. Remove entire document, if one exists, and
replace with this supplement. The last R6 supplement to this handbook was
6509.11h-94-2.
This supplement supersedes R6 Supplement 6509.11h-93-3.
Document Name
6509.11h,22-25
Superseded New
(Number of Pages)
2
4
Digest:
24 - Adds direction on interest, penalties, and administrative costs applicable to
delinquent billings. Adds specific instructions on applying late payment charges on
delinquent special use and timber sale contract billings.
24.1 - Adds 10-year table of interest rates and direction on charging interest to
federal, state, and local agencies.
24.2 - Adds direction on assessing penalty.
24.3 - Revises direction on charging administrative costs.
25.25 - Adds restriction on reporting delinquent debts to commercial credit bureaus.
/s/ Robert W. Williams
ROBERT W. WILLIAMS
Regional Forester
R6 SUPPLEMENT 6509.11h-97-1
EFFECTIVE 04/28/97
6509.11h,22-25
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FSH 6509.11h - SERVICE-WIDE CLAIMS MANAGEMENT HANDBOOK
R6 SUPPLEMENT 6509.11h-97-1
EFFECTIVE APRIL 28, 1997
CHAPTER 20 - ADMINISTRATIVE CLAIMS FOR THE GOVERNMENT
24 - INTEREST, PENALTY, AND ADMINISTRATIVE COSTS. Assess interest,
penalties, and administrative costs on all delinquent billings, including contracts,
agreements, permits, and so forth, unless specifically prohibited by the terms of the
document.
Interest, penalties, and administrative costs may not be added to the amount of
court-ordered restitution unless provided for in the court judgment.
1. Special Use Billings. (FSH 2709.11, ch 30.) The late payment charge on
delinquent special use billings must be made in accordance with the terms of the
permit.
Interest does not begin to accrue until a debt is owed. Therefore, interest and
administrative costs would not apply for any special use billings which are billed in
advance and paid within 30 days of the original due date. For example, assume an
annual fee for a recreation residence on a Term Special Use Permit, FS-2700-18
(4/89), was billed on or before December 1, 1996, with a January 1, 1997, due date.
a. If payment is not received by January 1, 1997, the bill becomes delinquent
and interest begins to accrue as of January 1, 1997.
b. If payment is received by January 31 (either before or after a follow-up
billing is issued), interest and administrative costs are automatically waived
because payment was received within 30 days of when it became delinquent.
c. If payment is not received by January 31, a follow-up billing should be
issued in early February. Include the principal amount due, interest from January
1 to the date of the follow-up billing, and the administrative charge for January.
d. If the permit has not been terminated and payment is not received within
30 days of the follow-up billing, issue another follow-up billing. Include the
principal amount due and interest from January 1 to the date of this second followup billing. Also add the administrative charges for the first and second follow-up
billings.
e. If payment is not received by early April, the third follow-up billing should
include the principal amount due and interest from January 1 to the date of this
follow-up billing. Also add the administrative charges for the first, second, and
third follow-up billings. Additionally, there is a 6-percent penalty charge for the
period of January 1 to the issue date of this follow-up billing.
R6 SUPPLEMENT 6509.11h-97-1
EFFECTIVE 04/28/97
6509.11h,22-25
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If more than one permit is included in the same delinquent billing, apply late
charges for each permit for each 30 days or any portion thereof.
If a permittee claims a billing was not received, it is still subject to late charges.
Late charges should not be assessed on bills not issued at the proper time if paid
within 30 days of the due date. See section 24.4 in the parent text for authority to
waive interest and late payment charges.
2. Timber Sale Contract Billings. Assessment of interest and penalties on
delinquent timber sale contract billings is governed by the terms of the B4 and C4
provisions of the contract. Contact the Timber Sale Accounting Financial Analyst
in the Regional Office if assistance is needed in specific cases.
24.1 - Interest. Interest is not applicable on delinquent billings to other federal
agencies.
24.11 - Interest Rate. The parent text refers to a Treasury rate, which is generally
revised annually; it is the rate used to assess interest on late billings. It may also
be referred to as the Treasury current value of funds rate, TFRM rate, or the TFM
rate. The prompt payment interest rate is revised semiannually and is used to
determine interest for the Government's late payments to vendors under the
Prompt Payment Act, as well as interest payments for settlements under the
Contract Disputes Act. Past interest rates follow:
TREASURY RATE
PROMPT PAYMENT RATE
1/1-6/30
7/1-12/31
1987
7%
7 5/8%
8 7/8%
1988
6%
9 3/8%
9 1/4%
1989
7%
9 3/4%
9 1/8%
1990
9%
8 1/2%
9
1991
8%
8 3/8%
8 1/2%
1992
6%
6 7/8%
7
1993
4%
6 1/2%
5 5/8%
1994
3%
5 1/2%
7
1995 (1/1-6/30)
3%
8 1/8%
1995 (7/1-12/31)
5%
%
%
%
6 3/8%
R6 SUPPLEMENT 6509.11h-97-1
EFFECTIVE 04/28/97
6509.11h,22-25
Page 4 of 5
1996
5%
5 7/8%
1997
5%
6 3/8%
7
%
Apply the rate provided in the terms of contract, permit, agreement, and so forth;
but, in the absence of direction therein, apply the higher of the Treasury rate or the
current prompt payment rate. Once the interest rate is applied on late billings, that
same rate shall apply until the debt is settled. The exception is for procurement
contract billings where the prompt payment rate is applied for each 6-month period
until the amount is paid. Refer to FSH 6309.32, 52.232-17.
24.14 - Interest on State and Local Governments. Due dates and application of
interest charges for delinquent state billings shall be handled in accordance with
the state cooperative agreements. Billings for activities with state and local
Government agencies not covered by the state cooperative agreements or other
agreements, are not subject to interest for delinquent payment. Some states have
statutes which prohibit the state from paying interest if they make payments
within a prescribed period of time. The State of Oregon statute provides them 45
days to make payments before they may legally pay interest, and California's
statute provides for 60 days. Washington has no similar statute. Therefore, a
billing to the State of Oregon with a 30-day due date in which payment is received
on the 40th day would not be subject to an interest penalty. However, if the
payment is received on the 55th day, interest charges could be appropriate, but only
if the billing was in connection with a cooperative agreement containing provisions
for payment of interest.
24.2 - Penalties. The 6-percent penalty shall be applied to the total amount of the
debt left unpaid after 90 days (principal, interest, administrative costs, plus any
other costs) for the period of time from the initial issue date to the billing reissue
date. The exception is for advance billings where the penalty charge would be from
the accrual date to the billing reissue date. Assess the 6-percent penalty based on a
365-day year (366 for leap year).
24.3 - Administrative Costs. Units should charge an administrative fee of $15 for
each follow-up billing issued after the effective date of this supplement. Also, add
other specific costs, if incurred, such as personal delivery of a follow-up billing,
obtaining a credit report or completing a Claims Collection Litigation Report. When
a unit forwards delinquent billings to the Regional Office (RO) to pursue further
action, the RO shall add $15 to cover the forwarding cost incurred by the forest.
The RO shall also add $15 if forwarded to a collection agency or $25 if forwarded to
the Department of Justice, plus any other additional costs incurred. These rates
are based on a cost analysis prepared by Financial Management in the RO and are
updated every 2 years.
Add the administrative cost charge to the first billing issued for checks returned
from the lockbox bank for insufficient funds (NSF) or other reasons.
R6 SUPPLEMENT 6509.11h-97-1
EFFECTIVE 04/28/97
6509.11h,22-25
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25 - DEBT MANAGEMENT.
25.2 - Debt Collection Tools.
25.25 - Referral to Collection Agencies. Notification shall not be made to
commercial credit bureaus until the Department of Agriculture resolves related
problems and advises us to begin reporting delinquent debts.