I only mention this story from Benjamin Lanka in the Fort Wayne Journal Gazette because it’s a topic near and dear to my heart: municipal collection efforts. Apparently in Fort Wayne an auditor has offered some criticism to the city for not having a consistent collections policy. They have a collection agency that charges them a 30% contingency rate – and the auditor is o.k. with that – but criticizes the city because there is no uniformity in when departments send outstanding accounts to the collection agency. Some try to collect on their own, others simply ship the account out after 30 days.
It’s a balancing act. Outstanding accounts tend to get less collectible as they age. But, some accounts are easy enough to collect with a simple letter or two; and don’t justify the expense of an outside collector. I’d say, generally, a 90 day policy is probably about what you’d want. In most cases, that amount of extra time won’t diminish your chances of collecting too severely; and, on the other side, those who are inclined to pay without more encouragement probably would have made arrangements in that time period.
At least Fort Wayne departments are pursuing collections. I think we’ve got Tippecanoe County pretty well squared away, but I’ve known of municipalities that just didn’t do much in the way of pursuing delinquent accounts at all. It’s usually not really a core function of whatever the department does, and the unpaid bills get overlooked. (And, never one to skip a shameless plug — if there is anyone out there who needs collection services in Tippecanoe County and the surrounding counties, you could do worse than the fine folks at Hoffman, Luhman & Masson, PC.)
Just to be clear- this audit was an “internal process”- a review set up by the Mayor to look at every department for ways to improve. This was a “good catch”!