Enhancing Court Collections

1. Enhancing Court Collections John T. Matthias

2. Terminology: Use of the words “Collections” versus “Compliance with Court Orders” • “Collection of fines and fees” is shorthand for enforcing compliance with court orders, which is the purpose of collections by itself, or in connection with other sanctions issued by a court (e.g., community service, class and program attendance) • Some jurisdictions have changed the name of the collections office to the court compliance office • Obtaining revenue to operate the courts through user-based fees is one of the realities of court funding, but this should not overshadow the purpose of maintaining respect for the rule of law and all that it entails

3. Improve Public Perceptions and Customer Service 1. Adopt a Debt Inactivation (not “Write-off”) Policy (Attachment 1) • Accurately portray the value of amounts owed to the court • Policy contains criteria and procedures for designating uncollectible debts as “inactive” – an administrative procedure to remove a debt from the list of amounts the court can expect to collect. Inactivation of uncollectible debts from the court’s accounts receivable ledger does not constitute forgiveness of the debt; inactive debts are still payable by the debtor.

4. Improve Public Perceptions and Customer Service 2. Increase Payment Locations Beyond Clerk’s Office • Example: In Orange County, Florida (population 1 million) – Over 300 convenient payment locations • 40 AMSCOT locations (Customer pays $1 per financial transaction) – offering check cashing, money orders • 260 Western Union locations (Customer pays a transaction fee based on total dollar amount) • Other possibilities: Grocery stores, government offices, kiosks • Goal: Fully integrate to case maintenance system

5. Improve Public Perceptions and Customer Service 3. Increase Payment Modalities • Pay-by-Phone/Interactive Voice Response (IVR) • Software interface to avoid data entry • Internet Payment • Software interface to avoid data entry • Lockbox (mailed payments) – ask your bank • Vendor opens the mail, deposits payments, sends electronic data (avoiding data entry)

6. Establish Standard Policies and Procedures for Collection 4. Compare Your Policies and Procedures to a “Best Practices” Checklist (Attachment 2) • In the 38 subject area items, note which items you do already or which are not applicable under state law, and which you can consider for an action plan • See references in the “Handbook of Collection Issues and Solutions” for more information (free CD is available containing the Handbook)

7. Establish Standard Policies and Procedures for Collection 5. Document & Flowchart Current and Policies and Procedures (Attachment 3) • Identify the baseline “As-Is” of how you work now • Use this as an opportunity to review underlying policies with managers and judges • “What is our mission related to compliance with court orders?” • Involve supervisors and front-line staff • Notes suggestions for improvements

8. Establish Standard Policies and Procedures for Collection 6. Develop Policies and Procedures (Attachment 4) • Draft/re-draft policies and procedures • Opportunity to review underlying policies with managers and judges • Do training to ensure that office staff know proper procedure • Facilitate training new/temporary staff

9. Establish Standard Policies and Procedures for Collection 7. Post/Notify Defendants and Public: Court Policy on Payment Due at Sentencing (Attachment 5) • The judge states the policy to each defendant • Written notice to defendant with due date (with Spanish translation available) • Brochure • Signs in the courthouse, at the clerk’s counter • Website

10. Obtain Judicial Cooperation & Buy-in for Enhancing Collections 8. Learn Judicial Preferences for Enforcing Collections (Attachment 6) • First seek uniformity among the judges • If uniformity is not possible, then document variations that judges insist upon • Example “standard guideline”: Collect 1/2 up front with the rest in equal installments over a period ranging 30, 60, 90, or no more than 120 days • Variations in max days, notice only after 60 days of no payments, 2 weeks before initial payment, different rules for unemployed defendants, probationers allowed a maximum of four months

11. Obtain Judicial Cooperation & Buy-in for Enhancing Collections 9. Do Strategic Planning with the Judges (Attachment 7) • Set an agenda and facilitate discussion of short-range, medium- and long-range recommendations • Plan timeline for implementation, by allocating time and resources to implement recommendations

12. Use Technology to Enhance Collections 10. Push Your System to the Limits of What it is Capable of Doing for You (Attachment 8) • Whether the system is old or new, capabilities are often not used because no one bothered to learn, or the person who knew them left • Review reports it produces and eliminate ones you don’t use • Figure out what reports will help you understand how current processes are helping or hurting

13. Use Technology to Enhance Collections 11. Understand CourTool Measure 7

14. CourTool Measure 7 Example Olathe Municipal Court (Kansas)

15. CourTool Measure 7 • Figure out what reports will help you understand how current processes are helping or hurting • By examining payments received within the reporting period, and categorizing payments according to their age, one can see how long the obligation has been outstanding. • When this is performed on a regular basis, one can see whether policy and operational changes (e.g., different colloquy in the courtroom, notices sent, show cause proceedings instituted) are producing results. • Also collecting the number of payments will allow calculation of average payment which will lead to some understanding of the dynamics of payments by defendants.

16. Use Technology to Enhance Collections 12. Determine Your Court’s Collection/ Compliance Rate (Attachment 9) • Figure out what reports will help you understand how current processes are helping or hurting • Measure 7 calculates the compliance rate for cases in which monetary penalties were due in full in a given month • Most courts look only at the dollar volume received during a month

17. Outsource Some Collection Services 13. Identify tasks cheaper to perform outsourced than inhouse – first determine your inhouse cost, then get bids for performing the tasks • Sending collection letters • Skip-tracing • Collection of delinquent accounts after, say 30 days, or when payments stop • Some inhouse collection units are very effective • Inhouse collection requires continuous management

18. Outsource Some Collection Services 14. Submit Old Debt to a Collection Agency • Every court has old outstanding warrants waiting to be executed • Execution of warrants is problematic • Collection agencies typically add a collection fee to the amount owed, returning the full amount owed as it is paid • Considerable effort will be required to go through the old cases and cancel warrants if they are still active before sending the account to the collection agency. • Warrants must be withdrawn before a case is sent to collection

19. List of Attachments Attachment 1 Debt Inactivation Policy (Michigan) Attachment 2-1 “Best Practices” Checklist (Matthias Collection Handbook) Attachment 2-2 Program Component Checklist (Texas) Attachment 3 Collections Process Flowchart Examples (Texas) Attachment 4-1 Court Collections Policies (Texas) Attachment 4-2 Policy Regarding Enforcement of Sentences Involving Payment of Money (Mesa City Court, AZ) Attachment 4-3 Collection Procedures (Mesa City Court, AZ) Attachment 4-4 Collection Investigator Program (Colorado) Attachment 4-5 “You are Hereby Ordered to Report” Notice & Financial Statement – English/Spanish (Harris County, TX) Attachment 4-6 Financial Affidavit Example (Mecklenburg County, NC) Attachment 4-7 Description of Correspondence (Harris County, TX) Attachment 5-1 Brochure on Fine Collection (Mecklenburg County, NC) Attachment 5-2 Notice on Payment of Fines (Mecklenburg County, NC) Attachment 5-3 Instructions to Defendants (Mecklenburg County, NC) Attachment 4-3 Policy Differences among Judges (Harris County, TX) Attachment 5-1 Collection Brochure (Mecklenburg County, NC) Attachment 5-2 Notice on Payment of Fines (Mecklenburg County, NC) Attachment 5-3 Instructions to Defendants (Mecklenburg County, NC) Attachment 6 Policy Differences among Judges (Mecklenburg County, NC) Attachment 7 Strategic Planning Recommendations (Mecklenburg County, NC) Attachment 8 Software Capabilities for Collection Management (Matthias Collection Handbook) Attachment 9 Collection Report Example (Harris County, TX)

20. Questions and Comments Contact information: John Matthias National Center for State Courts jmatthias@ncsc.org 303-308-4350